Hey hey everyone! Well that was short lived. Didn’t I quit last week? With all of the volatility the last few says, I asked Scott if I could write a guest post, and share my experience.
What can I say – the life of a trader can be as volatile as the market and my mood suffered right along with the DOW on Friday. Markets can do that to you and none of us should have been caught off guard, because Scott had been warning us for quite some time that the “selling of bonds was going to cause volatility to start ramping up in markets”. He nails so much, and it’s why we need to “hear” his words, in a professional manner. But I got involved in stuff, and it resulted in me not “heeding” his words (until over the weekend, explained below). The 2100 point drop in the DOW from market close on Thursday, Feb. 1 to this morning Feb. 6 shall be branded on my trader brain forever. We need to keep accumulating more and more trade setups, amd market movements, for it’s those experiences which are invaluable to help us put in perspective other situations down the road.
So the reason I felt compelled to write a post was because I simply chose not to listen to all the BS out there in Cyber Space like this garbage, and instead to totally focus on Scott’s work, and his knowledge and calm demeanor, of what was really taking place, and I’m damn glad I did. I could have acted less professionally yesterday when things were getting really bad, and just dumped my positions, but Scott and I talked extensively over the weekend and he gave me what turned out to be very prescient advice:
“Big selloffs on Friday usually lead to follow thru selling early on Monday morning, however, you then get the bounce. And then later in the day Monday more selling, which leads to a selling climax bottom, often in overnight trade (NY time). And then turn around Tuesday.”
Here is the NASDAQ futures overnight chart, with the 123 bottom –
And he outlined this whole thing on Monday morning (2/5):
“That is history…..More stock market selling today across the globe. Mondays after a big Friday selloff can often be a turn around day. And the retest on Tuesday. I’ve been “cutting back” on positions and “cutting back” on the time-frames.”
And again this morning (2/6):
“In the meantime, I do not remotely believe the bull market in stocks is over, not even close, but I do believe volatilty is here to stay, and I do believe in opportunities being more available going forward….As to stocks, for the last few days I have not given symbols. Since starting this website, I have given this advice at times – don’t “press it“. But I’m looking thru some of the wreckage, strong stocks which haven’t “broken down” like ABBV or IMMU (long), or former strong stocks which have broken down like OSTK (long), or stocks in accumulation like IOVA , or stocks which have recently broken out like INTC. I have given out numerous stocks which fit these categories….I talked about this idea yesterday – “Turn Around Tuesday” – an old Wall Street saying.”
So this knowledge was what I held onto over the weekend and through Monday, looking forward to “turn around Tuesday”. And turn around it did, with the QQQ up 2.5%. Good job Scott. It took a little time after the open, but my screens went green, every single one which presented some nice opportunities to exit some positions without huge losses and some other positions are showing signs of a turn around and once I get out, it’s back to daytrading for me and focusing on chart set ups and nailing the entry points. Scott’s knowledge has been invaluable to me and I use what I’ve learned more and more. When I stick to the plan I see much better results.
So that’s why I wanted to write this post, I wanted to thank him for keeping me calm and composed (after Friday’s meltdown) and sharing correct information instead of “fear porn”. Thank you Scott, you’re the best!
PS – If you like Scott’s work, it needs to be shared. Take it from me, it can save your ass.