I Was Looking For Two-Three Days, Played It For Four

March 4th, 2011 | by Hugo Gullett |

I was looking for 2-3 days of downward movement when I got short. I played it for four and that was a mistake. The fourth day turned the trade into a loss. In case you’re wondering today is day four since Feb 26th. The key item is that I thought we needed a bit more down. I planned on covering in the morning had we had a down open and then would have reversed to the long side or just kept it in cash.

I covered all my shorts this morning. I knew we would go higher. Yesterday’s post mentioned the gap up scenario that would concern me because that is what has happened in recent history. I also said in the graphic below that we would go to new highs. I think that is where we are headed and this seems so similar to 2003-2004 move now.

This was a frustrating trade. I stayed in cash and will wait tomorrow to see if any clues unravel by the close. Today was a major swap back to the bullish side in the number of stocks being up vs down.

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