This is why you trade what’s in front of you and not over expose yourself to emotional or ‘hunch’ trades.
Over the weekend, I posted an article arguing the point for a possible SPX breakdown. SMA10 crossed under SMA20, we were tapping on support numerous times, etc..
This is what we saw headed into this morning’s open:
I was worried that we would gap below Fib retracement and panic selling would commence .. BOY WAS I WRONG. This ended up being good and bad for me. On the bad side, I didn’t have gap-up longs when I woke up this morning since I was significantly on the sidelines. But, on the good side, I had free cash available to trade today on some of these moves that didn’t gap and sit. As a short-term trader, I vary the amount of swing exposure based on the overall market strength and then the individual stock (in that order). If the market is strong, I’ll then look at the stock and decide if it’s worth the swing exposure. It’s a risk / reward thing! I personally think if you were heavy long headed into today (assuming you’re a swing or day trader) it was a risky move and won’t always be there for ya 
So, having said that. How do I feel now? Well, the market averted the potential support collapse and instead, we witnessed the SPX finish above 1200 and, more importantly, SMA20. So, I’m all bullish, double down right? Mmmm, not quite yet. Yes, taking some swings to bed tonight may have been an ok move (I took a few home with me), but I’m assuming the market will take a little breather tomorrow and run more sideways than anything else. It will be an important day. Maybe more so than today. Strength needs to be maintained (close above SMa20) and I would really like SMA10 to cross north of SMA20 again to comfort me even more that this move is for real. A one day kaboom is exactly that and only that. However, it was strong and the charts have quickly turned in favor of the bull. Fun stuff, I must say.
The ADX (DI+-) cross today is very attractive for the bulls as is the Stochastic RSI 14. I would like to have see the volume be above yesterday’s sell-off, but it was still respectable. Let’s see what tomorrow brings.
