Thesis: The major indices had a huge run up toward ATHs with breadth and momentum diverging from price (as compared to old highs). The Nasdaq 100 had been the strongest of the major indices, but had failed to hold above the July highs, providing a nice short opportunity against those highs of 114.40 on the QQQs. Additionally, the Nasdaq 100 futures had held above the 200 hour sma since early October and broke below on 11/9/15. Prices had since consolidated below it and allowed it to begin downward sloping with RSI in a bearish range, suggesting that momentum was turning in favor of the sellers.The price target was a gap fill toward 109.70 and a test of the 200 day at 108.
Original Plan: Buy 1/2 a position on Wednesday’s close and add on Thursday’s close if we got downside follow through. Take profits on 1/2 once the gap filled and leave the other 1/2 for a test of the 200 day.
Actual Entry: Bought 1/2 a position on Wednesday’s close at 18.73, but did not add on Thursday.
|Symbol||Date Entered||Entry Price||Date Exited||Exit Price||Profit (Loss)|
Trading Notes: First off, I did not fully capitalize on this opportunity because I did not stick to my original plan. Had I put on an additional 1/2 a position on Wednesday’s close I would have had the opportunity to close half on the gap fill at Friday’s close and leave the rest on as a trailer in case we tag the 200 day like I suspected originally. Additionally, on the exit on Friday’s close, I took profits earlier than I would have wanted to because I began looking at intraday charts (5 minute, 1 minute), that cause me to lose all perspective of the bigger picture and my original plan.
Lessons: Follow your original plan so that I can fully capitalize on the opportunities that the market presents to me. Stop looking at intraday charts, they’re not part of my process and lead to nothing but overthinking and poor execution.
As always, if you have any questions feel free to reach out and I’ll get back to you as soon as I can.