This will be my last post for the weekend on SPY. I promise. I do want to do a post on DIA but whether that comes to fruition is yet to be seen. Perhaps if you are interested in DIA, leave a comment about it and it may give me more motivation to post it haha.
Anyway, I started posting originally as a way of journaling and planning. People just seemed to care about what I had to say and now it turned into something that I really enjoy doing and enjoy interacting and meeting many of you. Tradingview is a really awesome community, so thank you to everyone for your support, curiosity, questions and comments! They are all appreciated, even if you call me out as an idiot :P. Those are usually the best because, you know, I can be for sure and when it happens I need to be put in my place.
But in respect of the original purpose of posting, I am going to do a little reflection. I ended up stopping out of my short position on the S&P and the Dow as my stop limit was reached.
I am not going to stress the importance of stop outs and cutting losses, because enough people on here lecture us all about it and chances are you know. Whether you actually abide by your stops or not is probably the question, but regardless of what you do, you already likely know that stops are necessary. Despite the massive loss I sustained, it is really just a relief to get it over with. Its like, ripping the band-aid off. Just take a deep breath, relax, close your eyes and press that dreaded “Market Sell” button.
Boom.
Done.
No matter the losses, whether they be big or small, they suck. But it is, at the end of the day, a huge relief. Like the nightmare is over. Like the feeling you get on a bad, turbulent plane ride or after completing a haunted hayride for Halloween (my fav pastime in October), you have emotions of thrill and regret, but an overwhelming relief that its over. And, in the words of Shakespeare, ‘this too shall pass’.
Its even more frustrating when you are relatively sure that your thesis is correct. But if you remember that joke I shared with you a little while ago that went something like:
Who can be wrong 90% of the time and still make money? Answer: A meteorologist.
Who can be right 100% of the time and still lose money? Answer: A trader…
Yeah… that comes into play here.
The silver lining is that I was able to day trade myself out of the losses and still finish the day with a profit by trading IWM and SPY. There were amazing setups today and the market traded pretty straight-forwarded.
But what is more important is that I am going into next week fresh, unbiased and unburdened. Despite how unbiased and objective you try to be, when you have a sinking position going against you, you are constantly finding reasons for you to stay in it and it can cloud your judgement too much. Its possible and doable and it’s a requirement for those who are full-time swing traders. But it takes a lot detachment and its not easy.
I learned from this position that I don’t do well when I have a position going against me and I tend to panic. I panic added into my position and approached the situation much too cavalier. At the end of the day, I did stick to my stop loss, but yeah it could have been handled much better. Like don’t add. Don’t panic. And just stick to your stops. Thankfully I managed to stick to my stop, but the panic is real and difficult to manage. So something I need to work on. I don’t swing frequently and when I have swung, it has always been massive gains. This was the first time I swung and completely missed the boat. This was just a disaster and pride and ego took over.
I also realized that I am a much better day trader than swing trader. For whatever reason I tend to emotionally handle day trades much better than I handle swing trades.
Anyway, enough about me. Let’s get into the analysis. I am going to hold myself to this no bias and objective approach. So I am going to present the data as is, and hold off my opinions on anything.
I posted an idea on SPY for a longer term outlook. To add to that idea, as of right now, SPY remains within this downtrend. This is manifested by continued statistical significance. Until this is diminished, the downtrend thesis, at least for me, will prevail. Thus, I do expect more selling to happen. But check out that idea for more info and details. Otherwise, let us look at what to expect immediately next week.
SPY ANALYSIS:
So, on the qualitative regression trend, SPY is right at resistance. Will we see rejection back down? Maybe not. At least, maybe not right away.
If we look at it more closely, we see it closed outside of the trend:
This is pretty bullish. Just so much bullishness everywhere. Don’t we love it?
It definitely is…. Interesting. But let’s take a look at some of the technicals:
Our stochastics saw quite a jump from 33.77 to 70.15. RSI is up to 41.86 and Zscore up to 1.10. We did see an increase in buyers, but the buyer increase was marginal. Last week we had 9% increase in buyers and this week we had around an 8.6% increase in buyers. We have seen a steady decline of buyers since July. Below is the buy to sell ratio on the weekly from May till this past week:
You can see a steady decline of buyers.
Stochastics are in a very bullish area, however RSI and buyers are not so bullish. Cumulatively, probabilities seem to be mixed (more on that below).
So our prospective targets for next week are as such:
Bull: 1. 402.11 2. 404.78 3. 407.45
Bear: 1. 392.03 2. 388.51 3. 384.99
Probabilities are pretty mixed, there is quite a high chance of seeing 402 and 392. These are the two most favoured targets. I decided to put the probs into a bar chart for visual representation. You can see this below:
We have also reached our first real time monthly high target today (Friday):
Putting us in one of those rare months where we see both real time high and low targets. However, as we hit the second real time monthly low target, this does, alone, reduce our odds of hitting the second real time monthly high target (at 401.75).
Without correct for anything, the real time monthly high is hit around 48% of the time. When we correct for already reaching the real time second low, the probability we hit it is 13%.
There is also a lot of momentum; however, as we have yet to really see any meaningful increase in buyers, we have to be careful about relying on this momentum lasting.
SPY on the Daily For Monday, it does seem that SPY does favour some pullback. Your intra-day prospective targets are:
I want to be unbiased so I don’t want to talk too much about patterns, as they are really subjective. But this seems to be the predominate chart pattern that I can see on SPY:
Wisdom tells us this is bearish maybe…
Anyway, that concludes my analysis for SPY next week. Let me know what you think!
Please do Dow, or honestly please just write another self help article. I got mutilated on puts the last two days expecting at least a pullback to get out that never came. I didn’t respect stops because I, too, was way too cavalier. “Oh wow, I killed it on these calls and this just gapped 6%? I mean, pullback is definitely coming.” (I trade the Qs when going short).
Long story short, I actually ended up with a really severe bout of suicidal depression that I will carry through the weekend. I’ll be okay, and I still have puts, but I’ve been laying in bed since leaving early from work begging to read something that suggested this gigantic one directional rally will actually see some decent selling pressure like a normal (healthy rally) so that I can get out and take a long break from ever doing this again. All that to say what you said at the beginning was really helpful.
Bigloss109
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@kiedennis14 sorry to hear that man. I’m down almost 20k. I have 1.5k left. Also felt very suicidal, probably the closest I’ve come to killing myself in my life. However I decided to just be upfront with my family. Never deposit money again and never trade again. Think of it all like a minor set back in life. I don’t need to be fixated on it. I haven’t told them yet and the thought of telling my family and them knowing will be painful. I mean I started cuz I wanted them to be proud and have better lives and now it’s all exactly the opposite. I hope my family doesn’t put pressure or shame me too much. I plan to let them know sometime after Christmas especially if I lose the other 1.5k. If I can at least minimize my losses it would be better but I have no hopes right now to be honest. Im working on other areas, trying to distract myself. But yea man ur not alone and it’s never the end. Money is time, just work and you’ll make it all back the same ways u earned it in the first place. Life is valuable, if I were to kill my self my parents would probably get crippled from depression. No one should bear the pain and suffering of my mistakes.
Steversteves
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@Bigloss109, @kiedennis14 Both of you please DM me if you ever need support. I can relate to both of you, really. When I started day trading, I lost 50K. So. Much. Shame. My spouse at the time didn't know and I didn't know if I could ever disclose what I had done. Thankfully, through perservernce and just sheer will, I managed to actually sort my s*it out and get it together. Took a break. Saved back some money by working a sh*T ton of OT and decided to try again but small and with a different strategy. And my sheer desire to succeed and get better and do better really helped.
It is possible. It really is. But at times like this, you need to take a step back, reflect and plan. When I reapproached the market, my position sizes were 500$ max. Once I could consistently make 20 or 30$ a day, then I upped it. And now, my position size per day is no more than 2 to 3 K if I am playing options (I tend to use 0 DTEs) or 10 K if I am using shares (I say that but when I am super confident I break this rule sometimes). When I swing, the position is NEVER more than 4 to 5 K (options) or my normal 10 k for shares. These are manageable losses. Even to this day, the majority of my trades are 2 to 3 K. There is no need for more, because if you are holding for the move and actually trailing your winners, there is no reason to go super big. I know individual traders who do 50 K, 100 K and even 300 K positions. I know some of them personally. And I have out performed some of them (some of the time) with my menial 3 to 5 K position. Why? Because a well planned, well executed 3 to 5 K position is much better than the bull in a china shop approach. 50 K for a 3 or 5 second scalp is ridiculous. Its stupid. Poor risk management. Anyway, I can discuss more of this if you want.
But please, both of you, reach out to me whenever you need via DM!
JB7oh2
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@Bigloss109, keep your head up brother never give up you’re already stronger for this. You know there’s to much life to live and enjoy we are living in the best times focus on what you have in love and family. I’ve been there to that’s why I always talk about it on my post at least once month this is a stressful, mental pain way of making money anyone who says it’s easy is lying. 988 use it someone is always there. Apologies for jumping in here, take a break that,1.5k you have will work it just takes time, no such thing as fast money, compound base hits and in 3 months you’ll see and will have changed your way of looking at things please reach out if you want to talk about anything
Kody-Rogers
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@kiedennis14 hey! Just want to jump in here by way of support.
First, it takes courage to disclose that you’ve made a mistake. Too often we hear the successes, but never failures.
Second, money can be an evil bugger. When I’ve made mistakes (too many this year) I find I beat myself up mentally before finding the need to get away from it all.. I do this by finding something to provide mental/anxieties relief. I look at the stars, or watch a sunrise. I go on a walk, or listen to some music.
Last, we’re here to cheer you on! I wish you luck in the future. Please remember that tomorrow is a new day full of adventure. 🙂
Kody-Rogers
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@kiedennis14 ..and throwing in my two cents about this market MADNESS.
It’s not going to last. If you’re in the inverse QQQs it may be best to wait for a clear path out. The buying momentum was too extreme. I believe it got there because of the ‘great migration’ from crypto. We’ll see our digital currency markets stabilize in a week or two. Once that happens, funds will be reallocated from equities to the crypto space in FORCE. This will HURT equities, specifically those tied to leveraged ETFs (TQQQ, SOXL, etc..).
It’ll be a ‘gold rush’ to 25K Bitcoin, and a drubbing to 3700 SPX.
Steversteves
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@kiedennis14, Thank you for sharing and being really open about your feelings! I can relate to these feelings and the overwhelming dread, disappointment and regret. Its really difficult to cope and people are extremely emotional with money which is a huge challenge with day trading and any type of finance, especially when its your own money on the line. There is also not a lot of support for people who do this kind of thing. As my previous discipline that I still enjoy and do practice the odd time was as a psych NP, I thought about like offering free counselling to fellow day traders and traders in general for this exact reason. As someone with first hand experience who makes a living in the market, I can really empathize.
Please reach out to me in DMs whenever you need or if you ever feel like this again. It seems like these thoughts are still there, so please connect with me over DM if you need. I always have the TV app open so I generally hear the DM noises =).
And also I am really pleased to hear that you found the reflection helpful! I have been on the fence of posting more psychological aspects of trading and I think you have given me motivation to actually follow through with this.
Please take care, and I stress never hesitate to reach out to me privately! This too shall pass. Remember that. It really helps. It helped me through my lowest points in trading and in life in general.
Kody-Rogers
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@Bigloss109 here to support! Give me a DM anytime you need to converse. Thank you for sharing. 🙂
Bigloss109
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407.03 is where the big resistance is at. I hope we go there into Tuesday close with no pull back Monday and early Tuesday. I think the last hope is for FTX collapse to trigger margin callls after the fed rolls their balance sheet Tuesday. Will look to put my last 1.5k into 360p for 12/16. I think we see 332 if I’m correct in that being top which is just abt a 20% decline. I don’t think we pull back Monday. We broke 397 and rested it before moving higher into the acceleration zone. Max pain is like 380 so the rubber band down will be painful, it’s opex so max pain is semi relative. I think we put in a hammer or something. 6% Green Day’s just make it fare game to have 6% red days. Also for UVXY I’d ideally want to see the gap filled on 21.5ish. If that’s filled when we reach 407. Qqq to 296. That’s a sign imo. the squeeze headlines already coming out n last i checked that’s a sign top is near but things that major often need catalysts of sorts. So FTX margin calls rolling over maybe but we’ll see. Otherwise idk what’ll move this market down
DocKenneth
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Most of us who dare to trade have learned so many lessons through our losses. One thing I have to remind myself of daily is: "trade what is in front of you." It is so difficult for me to forget about what I just read about where the market might go... and just trade what is in front of me. I always enjoy your videos and write-ups. I had to laugh when I heard your comment about older folks and DIA... vs. younger folks and the SPY. I am probably the oldest of your followers, and still focused on SPY. However, please do the DIA outlook.
Long story short, I actually ended up with a really severe bout of suicidal depression that I will carry through the weekend. I’ll be okay, and I still have puts, but I’ve been laying in bed since leaving early from work begging to read something that suggested this gigantic one directional rally will actually see some decent selling pressure like a normal (healthy rally) so that I can get out and take a long break from ever doing this again. All that to say what you said at the beginning was really helpful.