The only approach following a wild overnight panic in global markets was to gauge to the Futures(ES) decline vs.our Shadowlist as we often do. The strategy was to watch for..”Dip buyers have been on strike…will they come out on ES overnight panic and buy the early selling pressure in individual stocks (not directly related to Japan and events?). Is this the point (SPX 1262 -December high/early Jan low) SPX 1270-1279 Pivot point support.”. It was evident in the first hour investors were not fleeing individual stocks in our list. The losses simply were not on par to the ES and the fact we fell sharply to the SPX 1262 off the open, exemplified the possibility of dip buyers coming off the picket line. Having a plan and seeing what ensues in relation to it, allows you the trader to decide what you should do. If you had sold out premkt/ open, you regretted it by close today. If you bought something that was down more than you thought it should be off the morning sell off, you made a nice trade (see below for some nice reversals). Interestingly the 1279 point became resistance from noon until the inline FOMC (w some economy ‘firmer footing’ words) finally pushed the market through this zone. Of course, if we had a ‘meltdown’ who knows what would’ve happened.. (or will happen), if the nuke situation worsened.
All in, we’re still on shaky ground (have to deal w violence escalation in Bahrain as well), but there are pockets to trade as below illustrates.
Shadowlist