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Price Action Analysis for Day Trading

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In these days of coronavirus threat and extreme volatility in markets, it's risky for a conservative trader to enter with long positions, even in the short-term. With the SP500 now in a rebound (only due to portfolio rebalancings of investment funds and smart-money short-covering, not fresh money), the key is to see how the SPX will behave when it approaches the 50% of its Fibonacci retracement if it does. Historically in all crashes the Dow Jones (or SP500) have two minimums, the second even lower than the first. And with a world recession in the background, it is more than likely that this will happen in the next weeks.

Therefore, since the end of February, I closed my entire long portfolio and have no long positions when the daily session closes. In March the same: zero longs. I mean, I only do day trades on Index ETFs as SPY, QQQ and IWM. That's my "coronavirus strategy" in days of VIX above 50: preserve cash and do only day trades, closing the trade before the s…