Traders on a Cliff – December trading plan 2015, Corona, CA. Markets are on the cusp of a sell off or are they on support?
We started the week thinking the S&P500 emini futures could be heading to new highs, even though the news was nothing exceptional which normally means a rally, sellers moved in and took control of the direction.
Sellers took price to through the 200 MA just as we were getting the Bullish Cross of the 50 Moving average and the 200 Moving Average.
Support has come in as the previous swing lows just above 2000 (the psychological support)
1998 to 2004 is first support, next support coming in at 1980
Then Previous point of control at 1960 for direction and possibility of moving to 1938.
Day Trading Plan for a sell off. What if the markets sell off and break through these supports?
Where will be the major supports for a major sell off? First we would look for 1860 then a double bottom at 1820 confirming the previous swing low on major seller price action. These are the targets for a sell off.
Day Trading plan for the Fed announcement on Tuesday.
|Dec 16||2:00 PM||FOMC Rate Decision|
Stay away from the news on this, you are going to hear them crying over which way to go and how it could effect this or that and give us some of the biggest margin calls in history and the collapse of the bond market.
Trading the News is for the il-informed trader. Never speculate.
Stay away, wait until it has direction and then join in. Don’t try and guess the markets. Wait until you see the direction of the market.
Normally when everyone is crying doom and they bring out the doomsayers you haven’t seen in years, I would search for the contrarian positions. It seems like everyone is thinking “this could be bad”.
I am watching for consolidation on both Monday and Tuesday with a possible move down to the next support level.
Being a buyer of dips could be expensive here as there could be quite a bit of volatility.
Remember, you don’t have to trade. You can wait for a market condition you are more familiar with or you have experience trading in with proper risk management.
It is the end of the year, do a little self reflection, write in a journal, project where the markets could be going. Go over you system and see what works, needs some work and what could be thrown out. The key is mastering the education you have and leveraging it a risk management system that protects your capital.
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