Originally posted by FasterPussycat
when do we get the BEEF??? give us something specific something wonderful that we can use TOMORROW MORN 9:30am to take Gold off the Street! i know that YOU know some great trade secrets that you're not revealing here. cmon man, give us the good stuff!
"Besides, I NEED simplicity because it is all I am capable of!!!"
oh come now, you're a helluva smarter than that. we know it, and you know it. 
prove it to us by saying something brilliant.
Faster, my man. I just wrote a lengthy diatribe and then had a power surge and lost it all. But since you have always been so kind to me in both your words and actions, I will attempt it all again JUST FOR YOU!!!
Trading in the morning.... specifically the open (9:30...how can I address your question more specifically than that?)
I talked about "fading the open" I think today. Somewhere in this thread anyway.
According to my experience, and statistics provided to me, here is my list from best to worst scenarios for an opening "fade". Keep in mind this needs a bit of qualifying for tomorrow because the momentum from the prior day effects this list. But nonetheless:
#1: Down open in an up market
#2: Up open in a down market
#3: Flat open in an up market (buy, but not truly a fade)
#4: Flat open in a down market (to short, but again, not a fade)
#5: Up open in an up market (dangerous fade)
#6: Down open in a down market (see #5)
Now defining a "fade" on a flat open is open to interpretation. Make your own. This is just semantics.
Fading a trend (#5 and #6), while truly a "fade" by any definition, is just not a good percentage play, so the pros don't do it unless the move is more extreme than they feel can be sustained. This is a judgement call, and I am not going to tell anyone if we are up or down too much. Use common sense and maybe even charts if that is your inclination.
Now tomorrow specifically:
First of all, it is questionable what kind of market we are in. Looks like a consolidating market, but we have been (or I have) fooled into thinking this too many times over the past two years. So even though we seem to be in a short term up trend, I guess it is safer to say we are still in a down trend. But we have been up the past two days. Conventional wisdom for overnight (momentum) plays is that the 2nd day up (or down) is the best play. So if this is true, then I, as a momentum player, should be long overnight. But I am not. I was last night. It worked marginally. And I could have easily lost. Or made if I held longer (gambled). Tonight I am totally flat....a relatively (for me) rare occurrence. Yesterday we trended up for a long time; right into the close. There was huge momentum. Today, we were all over the map. So to me it was not a compelling play. Overall, I have been overnighting extremely lightly for over a year, and I never feel I am really missing out. I have missed some opportunities for sure, and I have saved myself a number of times as well.
So now I will come in tomorrow flat at the open. If we are in a down market, I should be fading an up open. But my thinking as an overnighter says no...the 2nd day up theory. Also, last week (Tuesday?) we had a strong up open out of nowhere after a down close the previous day. Like many of us, I got badly burned as the market rallied from the bell until it collapsed very late in the day. So therefor, I am not anxious to fade an up open.
OK...I have said what I won't do. This is not what you asked for. But I felt it worth explaining HOW I get to my plan for tomorrow. Which is somewhat a process of elimination. And I have eliminated my 2 primary strategies. Carrying positions overnight hoping for follow through (momentum) and fading the open. So now I am to my third and final opening strategy.
I will come in early and try and see if there is any news or event driven reason to believe a stock or sector should be strong or weak. I will keep my eyes on the stock/sector/market to see if what I anticipated starts to pan out. I will not trade the first 15 minutes or so. The extreme choppiness lately in this time period makes things so difficult. Look at this morning for a great example!!
If after 15/20 minutes I feel that it is time to get involved, I will. I will buy if I think the stock/sector/market is strong for whatever reasons I have .... (use your own....charts, news, gut, whatever. This is something I can't tell you how to do). If it works, I will stay with it. If not, I will be quick to get out....Oh, I should have mentioned that if I want to get long and it's a strong open, I will wait for a sufficient dip (20-25% in the S&P futures is a good indicator). Same in shorts, just everything is the converse. But whatever, not before the "noise" of the open is out of the way.
Now, if I do anything at all, and I certainly may not, I will make every attempt to be flat by 11 am. This is for 2 reasons. First, I find it extremely difficult to trade between 11 and 1:30. I think the fills are horrible, the market is unpredictable, and secondly, I need to clear my head. I consider the morning and the afternoon to be separate. It is almost like a double header. A morning game and an afternoon game. If I have positions from the morning all day, it seems to mess my head up. Virtually always when I have an all day position, it is not a good one, and I am just struggling to deal with something bad. Fortunately I have (for the most part) outgrown this tedious kind of frustration. If I do have great positions, with absolutely no reason to get out, I will use stops and get away from the screen. This is the ONLY time I personally use stops (other than mental).
So there is my plan. I hope it is clear enough.
Peace, love, and rock and roll to all!
RS7
