Looks like the market acted according to our pink line prediction (see chart below) for the S&P500.
Considering the size of the drop, we didn’t get hurt too bad. In fact, we booked a slight profit due to good exits in the morning on the Russell (IWM calls) as well as the VXX short that more than made up for the drop in the S&P.
The alert we sent at market open to exit the IWM calls was correct in hind sight. Even though we had just $300-$400 profits on that position – I wanted more but something looked fishy with the pattern so we sent the alert to exit.
Judging by the massive drop after the Fed minutes today, the decision to exit IWM was correct.
However, Considering how solid the prediction was for SPY (we nailed the pink line prediction), I have to say my decision not to take profits when the S&P was at the high of the day but to instead let it meander was not the right choice.
I knew we were at resistance at 2274 ES , and our position was up a few hundred. By not taking profits, a winner turned into a loser. The good thing is the size of the loss wasn’t so bad – around $300 — offset by our profits in the IWM calls today.
We also exited some of our short VXX – that we entered at 17.14 – with exit price around 15.53 in the morning – so this realized just over $300.
So despite an unexpectedly volatile day, we came out in the green.
Also, I was very close to giving up on the metals – but looks like the metals staged a comeback in the last hour. See below for details.
What I did not expect was the size speed of the drop from that 2374 region. I thought it would meander around and then drop, but it basically touched it and dropped immediately.
At thsi point, there should be a bounce towards 2353 and if it stops there, it could turn back down to 2335 ES. Hard to tell with the market just straight down.
The prior S&P chart suggested resistance right at 2374. Compare that to what actually happened.
We exited the IWM calls at the open and were able to avoid what could have been a really nasty day.
Gold dropped for most of the day until the last two hours after the Fed minutes. Also, the GDX, which has been struggling at 23.5 resistance for quite some time finally made it over after the Fed minutes.
It has since pulled back below 23.5 – so we’ll see if it can hold and break through.
Silver also stuck its nose out over resistance and pulled back to the middle region that it’s been consolidating at. After the Fed minutes, it ifnally started moving to 3 intraday attempts at breaking 18.15 support, which it failed. Expecting some immediate move for silver in the next 24 hours…or else.
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