Tuesday, October 21, 2014

Bought SPXU @ 48.63

Just for FYI and disclosure, I bought SPXU shortly after the open at a price of 48.63.

This effectively is shorting at this mornings gap up opening.  The gap open occurred above the 191.00 level which I thought may be resistance here, and price is also testing the 10 period moving average of the daily highs.  Given that the weekly MACD is down, and the daily momentum is below its moving averages and without divergence, I view this as a high probability set-up for a pullback to occur in SPY.

I don't have a stop on the position, so if you are using this info for trading decisions you need to determine your stops and position sizing, etc.  I find that when trading mean reversion type strategies like this, the overall profitability is higher without using a stop.  So you control risk through position sizing/ capital exposure rather than via the stop price.

If the hourly time trade chart generates an effective sell signal on price action, then I will place a stop on the position and await a short-term extreme pessimism to exit the position at.

Start a comment dialogue below if you desire more information or assistance here.


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