Warrior Trading Blog

+3.6k As Market Bounced 900 Points Off Yesterdays Low!

market bounced

+3.6k As Market Bounced 900 Points Off Yesterdays Low!


What’s up everyone? All right. So after yesterday’s 1,000 point drop in the market, today I had one goal. It was just to get in, get green, and get back out. I did it. I finished the day up $3,600. I didn’t overtrade. I just had one goal. It’s to be green. Right now I’m trying to re-coop some of the losses from earlier in the month. So finishing the morning green is a good day. I’m going to get back at it and do it again tomorrow morning.

So let’s break down the trades from today in our Midday Market Recap.

What’s up everyone? All right. Time for our Midday Market Recap. Today’s going to be a short one just like the trades I took this morning. So like I said, my goal today was not to try to be a hero. It wasn’t to try to make back the $4,000 I lost yesterday or the $7,000 I lost on the first day of February. I dug myself a hole. I’m down $10,000 on the month and my goal was just to start digging myself out. I’ve been in the red more time than I can count. This isn’t the first time I’ve gotten myself into the red. The goal right now is just to be aggressive. It’s a kind of hit and run approach. Get the profit, get out. Get the profit, get out. I do that five, six, seven times in a row. Five, six, seven days in a row and I’ll be right back to where I was before the draw down. That’s the way I have to do it.

If I try to swing for the fences, then what almost always happens is that I end up … When you start to get into that home run mentality, you’re thinking about how big the winner could be and, “Oh, okay. I’ll take more risk because the winner could be so big.” You just end up making mistakes. You end up losing more money. Then of course the further the hole, the deeper the hold gets, the bigger the home run we need to be at to get yourself back out. So you just got to start digging yourself out one trade at a time.

Today $3,600 of profit. $3,598.18 is good. Green is good. This is great. This actually ends up recovery almost all of yesterday. It wasn’t planning on that, but it was good. Puts me in better shape. So now I’m down like $6,900 on the month. I know I can get out of the hole easily. I mean, that’s really just one good day and I’ll be back in the green, or maybe a couple of smaller days depending on the market. But given the fact that the market dropped a thousand points yesterday, over a thousand points. Today, I didn’t have high hopes for momentum stocks. I felt that traders would be so focused on the overall market that it would take all the attention away from small caps.

So yesterday, during the Pre-Market Analysis, I was talking about how I was in a meeting while the market was dropping. So I was in a meeting that started at two o’clock. So let’s see, here’s two o’clock. I was watching right around here. This is when TVIX was just under $10. So I was watching it here and I thought, “If the market breaks low day, I’m going to get in TVIX.” So TVIX goes up when the market goes down. It’s the fear index. It’s an ETF. So I put out my order on TVIX to buy at $10. I pressed the buy button for 5,000 shares. I did not get filled. I got filled zero of my position.

Now, let’s look at TVIX here. Then let’s look at SPY. All right. So here was TVIX yesterday. Let’s see, this is where I was getting ready to place the order right here when it was flagging under $10. My order didn’t get filled and I was like, “You know what, I’m not going to chase it because I don’t usually trade ETFs.” This is not my wheel house. I feel like I’m maybe revenge trading a little bit because I lost money earlier in the day and maybe let’s just leave it alone. So I ended up not chasing it and it squeezes up to $10.50. I’m like, “Ah, man. That would’ve been $2,500.” Squeezes up to $11. I’m like, “Ah, man. That would’ve made back all my losses from earlier.” It goes to $12. It goes to $13, $14, $15. I was just watching as the market dropped. I was like trying to focus on my meeting, but I was watching this like during the whole hour. I couldn’t believe it. It was pretty much like a flash crash in the sense that it was this accumulating sell off. It was just a final flush and then a quick bounce off those lows.

We ended up going even lower, but I didn’t capitalize on it at all. So given the fact that that’s what happened yesterday, I was very cautious today. I knew that XIV and UVXY, both of these funds have gone all the way down. They’re basically lost all their value with the market dropping the way it did. V’s trade, these are VIX short term so it’s an inverse ETF. So this trades in parallel to the market and traders will use this for bounces. So you would buy this when the markets starting to bounce. You could’ve bought this down here when the market started to bounce or was it … Let’s see. I’m having a hard time seeing my chart here.

But in any case, I didn’t trade these. I just ended up not getting the opportunity on TVIX and then I didn’t have any other opportunities. So that was that. I just knew that today was going to be a day that most likely traders would be focused on the ETF’s for scout opportunities. 83 million shares traded on TVIX today. This is crazy volume. So yesterday it had 132 million shares of volume.

Now, I wondered this morning if the market would sell off and flush down to the 200 moving average. That did not end up happening. We didn’t hit that level on the SNP500. We ended up bounces up like 300 points earlier this morning. Now we’re kind of grinding higher. It’s up 360 points. That’s good. I mean, this seems like a kind of reasonable pullback here and we’re making our way back up. So I’m thinking that if we continue to grind a little bit higher or at least we hold above 255-ish, that we’ll probably see this is just short term pullback, consolidation, and then most likely a flag and a move back up.

We have to be a little careful about bare flagging on the daily, but hopefully tomorrow we’ll start to see better opportunities in the small caps as traders kind of start to shake off this drop. This is the type of thing that creates fear in the market, and when traders are fearful, they’re going to be more cautious on small caps as well. They’re just overall a little bit fearful.

So ARGS was my only trade today. It was gaping up. So it was a gap and go despite the market having dropped 1,100 points yesterday. This was gaping higher. I jumped in at … I took a couple trades at $2.20. Getting in at $2.20. Selling at $2.31. Adding … Not selling all of it. Selling most of it. Adding back at $2.30. Selling at $2.38. Adding back at $2.40. Selling at $2.50. So on this trade, I was just going for small 10 cent winners. Getting in, take 10 cents. Sell three quarters or almost all the position, add back, try to get 10 cents. I did that three times between 10,000 and 14,000 shares and I made $3,500. So overall that was good. Green is good. This is definitely a kind of hit and run market. Get in, get your profit, get out of the way. Don’t overstay your welcome.

That’s going to be my plan tomorrow. Look for a couple stocks like this that’s kind of just that really honing in on a quality setup’s mentality and see if we can find a couple trades that we can jump on, get aggressive, get the profit, and then get out. If we end up seeing a stock start to open up, go from $2.60, $2.75, $2.80, $3.00 and continue higher, I’ll just keep scalping the 10 cent, 15 cent, 20 cent moves on each one of the break outs. I think the next stock we see that goes from $2.00 to $8.00 in one day does a big 300%, 400% move, will probably start a new round of really frenzied kind of greed hungry momentum. But right now there’s a little bit of fear in the market. So I think we’re going to see more of these short bursts. Take what you can get, and don’t overstay your welcome because some of them will definitely retrace.

All right. So that’s my game plan for tomorrow, and if I can get another green day under my belt and start to kind of recover myself a little bit on the week, that would be awesome. I’ll be able to start to get February back into better shape. So that’s the goal right now. We’ll just kind of play it by ear and see what the market looks like in the morning.

All right. So that’s it for me. I’ll see all of you guys back here 9:00, 9:15 for Pre-Market Analysis tomorrow morning. All right. See you guys in the morning.

If you’re still watching, you must have really enjoyed that video. So why not subscribe and get email alerts anytime I upload new content? Remember, when you subscribe, you become a member of the Warrior Trading family.