It’s a correction! Feb 2020

And just like that, the gains from November 2019 to last Friday are gone.

This week has been a pretty interesting one in the markets. I’m a bit surprised at the price action, it’s been far more aggressive to the downside than I expected.

My plan of attack for this price action was to capture profits after the first major drop, load up for a quick push higher, then repeat on the next leg down.

This week didn’t work very well for that type of a plan! I was able to capture some very nice profits on Monday, and reloaded for a quick push higher – so far those positions are sitting on some nice paper losses.

I’ve continued to nibble throughout the week on the longer side of the trade as the market has just flat dropped; those trades haven’t been profitable throughout the week and the great gains from Monday have been mostly eaten up on paper at this point.

That’s a fairly frustrating situation – welcome to trading!

I’m still expecting a firm recovery; however I don’t think the intermediate play is to the upside. Daily movement yes, maybe even weekly to play for a quick pop to the higher side.

I’ve been selling vol all week in VXX and UVXY; I expect those will end up very nicely profitable – for right now they are just ugly ducklings.

At the close on Wednesday, I went long /ES at 3110, needless to say that was a painful thing to see in the morning on Thursday, however I expect this to continue to move in the right direction today or tomorrow.

Anyhow – stay safe and trade within your risk boundaries!

Here’s to a brief relief rally today or tomorrow 🙂