Sometimes following your own forecast is harder to do then writing it. I find that true this week, as I posted on last weeks' "Weekend Update" that we would probably go up to 1073-1076... and we did. But, I didn't listen to my gut and follow Scenario ONE or TWO, instead I followed Scenario THREE and went short on Thursday around 1062... only to have to sell that position on Friday for a small loss.
Why didn't I listen to my own forecast? Who knows? Maybe because my forecast was based on logic and technical analysis's, and I went short on emotion. This just go to show you that it's not easy trading... even if you make a correct forecast from time to time. Your emotion will hinder your success untill you learn to control it.
I must admit that I'm not there yet. I still let the outside noise in and react to it with emotional trades. I clearly stated that Scenario THREE was unlikely, but I went short anyway. Every chart I looked at had us retracing back up to almost 1080 to form a right shoulder, then dropping. But, in the end, I'm still here to trade another day. Let's just hope that I learn from this mistake and don't make it again.
I'm expecting a few more days up to hover around that 1080 area. We could see a down in the morning and back up in the afternoon day on Monday. Then more up on Tuesday, but probably a flat close. Wednesday through Friday should be more interesting as I expect more bad news to be released. The difference this week will be that the market will be up against heavy resistance and won't be able to break through on that bad news.
So, I do expect selling to occur, and I'm still inclined to believe that we will hit 998-1000 before option expiration. It will most likely come fast and hard, and could hit it before the 20th. If so, you can expect a nice bounce off that level. If you can keep a close watch on your account you could make some quick money by going long on the first hit of that area. If could dip as low as 995 intraday, so be cautious... and be quick to jump on.
So, I'm looking to go short on Tuesday around 1080... if it makes it there? It may do so on Monday as I expect another light volume day, which of course means another UP day. But, my gut tells me that Monday will dip down early and rise back later. That will squeeze any bears that went short at Monday's open, and get the rally up into Tuesday.
Ask yourself that question... "What would you do if you were a Market Maker"? Of course the answer is... Steal as much money from the dumb public as possible! But how specifically would you do that? I think a fake down move to tell the bears that "This is it", only to pull the rug out from under them later in the day with a rally back.
Regardless of how it happens, I'm going to go short again around the 1080 area. I'm planning on holding these positions until opx if needed. However, I think we'll hit at least 1020 before opx, and rally back into it.
Here's a little bonus video for you...