Monday, February 15, 2016

Feb 15 - I got a bad case of FOMO

FOMO is hitting me like a nasty flu.  Looks like I made a trading mistake by pulling longs off the table on Friday that were entered Thursday.  Everything was a go except SPY volume.  In retrospect, the optimal play would've been maybe a 1/4-1/2 position given that I was fairly confident we had a floor but also as I wasn't sure whether a retest was coming.   Right now, futures are up huge at 1.75% and set for SPY to gap up around 190 which is well north of the BB on the 30 min and 60 min frames.  So buying into the open is off the table and maybe even shorting the open.

I have two main targets for this potential up move at 195 and 198-199 in SPY.  I feel very confident 195 will be hit within a few weeks and pretty confident that 198 isn't an unrealistic target.

In a best case scenario we would see a gap fill at some point but might be difficult.  Probably the highest I will buy into a long is around 188 which would give good risk to the reward of 2:7 assuming a 186 stop.

So the play Tuesday for me is to sit tight on the open and pretty much wait it out unless we see a retrace to 188.  It is possible this train doesn't make any stops for me to hop on, i.e. continuing up after 2 consecutive unfilled up gaps.  If this happens would be unfortunate but my system doesn't allow me to stick my neck out into what will be very overbought short term conditions bc of this potential big opening gap.  Tentatively I am looking for a buy signal on the 30 min frame to entertain longs and/or a pullback to 187-188.

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