Reversal concerns at resistance. Who’s responsible?

Reversal concerns at resistance.  Who’s responsible?

reversal dayReversal concerns that I have been warning about seem to have had some merit.  As soon as the retail market closed yesterday the futures began to plunge south.  Undoubtedly there are a lot of traders that will feel slighted this morning.  Most will place the blame for their troubles on the mean market rather than accept responsibility.

In truth, the clues of this possibility have been all over the place.  The failure to notice them rests fully on the shoulders of the trader.  I know that sounds harsh but it’s the truth.  If the trader accepts the responsibility then this becomes a learning experience that will not be forgotten.  However, it will be quickly forgotten and likely repeated by the trader that assigns blame somewhere else.  As we always say, price action is leaving us clues and they must not be ignored.

On the Calendar

A light day on the Economic Calendar today with only the EIA Petroleum Status Report numbers of any significance.  It will be out at 10:30 AM Eastern time and could easily move the market after its release.  To also keep us on our toes with have 50 companies reporting today on the Economic Calendar.

Action Plan

It would appear my concern about the struggle with we were having with price resistance is being validated this morning.  I know some likely thought I was out of my mind selling positions that were still going up yesterday.  I’m sure glad we did at this point!  Now, we must focus, avoid emotion and deal with the current trades we are holding.

My plan will be exit positions calmly and as efficiently as possible but only after an evaluation of price action.  For example, our long-term position in MSFT will most certainly lose some value today but at this point, I don’t feel a need to cut lose.  As the day progresses that decision could change but for now, I want to stick with the trade.  However, others will likely have to be closed quickly to maintain profits.  In short, I want to react to current conditions with a business frame of mind.  Emotional decisions have no place in business.

Trade wisely,


Comments are closed.