Home > Lessons from the trading floor > And how was your day?

And how was your day?

We don’t get many of days like today, where we open down 150 on the Dow Jones just to finish up 75 points — all done on decent volume for the $SPY 250mm shares. It’s safe to say that most traders come in to work today with a short agenda. Those that didn’t get run over today where patient and recognized that the dynamics and the internals of the markets today was different. For starters the VIX index opened at its highs 27 and proceeded to close on its lows – that’s the 1st clue to not be short and start looking for longs.  Any shorts taken on the pause at 10am were quickly closed. That’s when the firm started to look for longs.

The 2nd clue was the very strong buy programs we where getting in the afternoon, the MA on the 2min chart rising to +500 in the afternoon, we had plenty of +1,000 and even some +1,400 tick readings.

The 3rd clue is to follow the leader, some such as AAPL and GS – which spent most of the day making higher highs .

Bottom line, if you had your “short hat” on this morning, you either took some small losses in the morning and adapted to what the VIX and the TICKS were telling you, so make it all back and some in the afternoon.

Tomorrow is another day, with plenty of more earnings in some of the large names.

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