Wait It Out!
If you have been visiting the lair for more than a few weeks then you probably know that the Mole is pretty adamant about cutting losers short and letting winners run. If you are still holding short positions at this point then you are most likely considering whether to cut out here or to leave at least some lottery tickets in the running for a possible continuation of the ongoing correction. For some people this is one of the hardest aspects of being a trader and IMNSHO it is one that separates the hardened steel rat from a regular field mouse.
But in a way this question can be reduced to a very simple exercise – and it goes like this:
- Has my target been reached? If yes then take profits – if no then proceed to #2.
- Is there any new technical information (your soggy bottoms and any rumors don’t count) that changes the context of the ongoing campaign? If yes then proceed to #3, if no then do nothing.
- Does this information represent evidence that requires us to change or cut the current campaign short (i.e. new resistance/support, opposite entry, reason to lower stop, etc.)? If yes then take action, if no then do nothing!
So if you project this simple exercise on the current tape on the E-Mini then my conclusion at this very moment would be to do nothing. Yes we have received new evidence in the form of a new NLBL on the daily chart. This means that 1656.75 becomes our new line in the sand – which means I will remain short below it and long above it. I also enjoy that ST diagonal that now comprises three stabs higher, suggesting to us that a big seller remains present there.
On the NQ I’m seeing an expanding range which is good news in that we are most likely going to see acceleration here once that expanding diagonal breaks. However it’s bad news as of right now in that a lot of outside candles represents shitty honeypot tape you don’t want to get drawn into. By all means play the swings if you know what you’re doing.
A few words regarding gold. Yes, it’s driving us nuts again but recall that it has done this in the past. And every single time the pain has in the end been worth the final reward. Thus when I see another entry here I will close my eyes, think of England, and then take the damn entry! The bus moves fastest once everyone got off – never forget that.
Nice entry on platinum this morning – I hope you grabbed some of that. Just wanted to let you guys know that I’m holding this sucker into 1556.
This entry was posted on Thursday, August 22nd, 2013 at 1:37 pm. Both comments and pings are currently closed.