Rough Day

It’s going to be a quick one today as I’m a bit pressed for time. We continue to bounce around in pretty rough waters here – the gyrations have been brutal today across the board. As you know I kept a pretty low profile (i.e. reduced position sizes) but was stopped out on the equities front after going short at ES 1860. Let’s observe where we are:

Nowhere tangible that is – we got to enjoy more noise and stop runs galore. As I’m writing this the E-Mini is trading back above the NLSL at 1866.25 and the 25-day SMA is within a tick of 1861. I don’t see any good entries here and there’s simply not enough evidence for me to take a long here above the NLSL as it has been breached three times now – as such it does not offer sufficient technical context. We may get a hammer today but we have breached below a previous spike low so it is not valid as a long entry per my rules.

I’m not going to force this and as such have decided to wait for better entry opportunities. I’m keenly aware that this may be an extended top formation and that we may see acceleration here any day. But without a solid entry I cannot let wild gyrations force my hands and/or dilute the process. So if it takes off without me – fine, I’ll live with that. But it’s equally possible that we may be presented with better entry opportunities later this week.

Our gold campaign hasn’t been easy today either – I got sucked into a long trade first and then spit out and reversed for a short entry. That one happens to be working out fine thus far and I’ve made back the 1R I’ve lost on the long side. My stop has already dropped to the 1R mark (bending the EOD rule a tiny bit) and until that gets touched there’s nothing for me to do.

Bottom Line: When the going gets tough it’s not smart for the tough to get going. You cannot force the process and although markets will try to shake you off before painting big moves you have to preserve your system rules at all cost. Sometimes you wind up missing the boat after all but you cannot let fear (or any emotions) rule your trading – quite on the contrary. The more erratic the market becomes the more disciplined and structured my approach needs to be. Gold hasn’t been easy today either but it showed us that there are always more victims out there. I do not have to bank coin on the equities side and neither do you. So let’s keep it frosty and wait for solid technical entries. See you guys tomorrow.

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Cheers,