It's nearly 5 am and I can't sleep. I should never have turned on CNN to view the tragedy that's unfolded and still unfolding in Japan. My heart and prayers go out to all people(s) affected by this hugely tragic time.
I haven't posted in quite a while, but I was inspired to write a bit more then I typically write on my Facebook page (Michael "Waxie" Parness).
Trading this type of market is hard at times. Anytime you are ruled by news where people are sitting transfixed (as I've been). So, it's amazing watching the futures literally rise and fall directly in line with almost every sentence that comes in relation to what's going on in Japan. I mean, literally every word. They say there's an explosion, market futures tank, then they say they think its contained and the market bounces. The range is insane as well, though great for trading I guess.
So, how do we trade this? Smaller lot sizes, tighter stops and be willing to take losses. Don't end up becoming an investor in something you have no real interest in owning but you are crushed on it so you keep it.
It can be very frustrating as moves are extended, then choppy, then move violently on some news story. Ultimately the market looks very weak and has and instead of dips being bought we have seemingly switched to rallies being sold. As such, that means on any GOOD news we should get a violent reaction/squeeze to the upside, but overall who in their right mind wants to be long for the long haul here this second? Perhaps that will turn out to be the best idea, but I prefer to be patient and wait.
Now, as far as support zones, watch 1250 for sure as a huge support, below that 1225 and then 1200 are the obvious choices. The world right now seems like an almost surreal dangerous place. I don't think ever in our lives or anyones lives have so many "fires" been going at once. There are potential disasters all around us. Thus, the best thing we can do is keep our integrity and our cool heads. It's hard in times like this, we're human, we see these horrible images and we naturally experience a wide range of feelings. I will submit to you that if we pick our spots we have tremendous opportunities here NOW.
So, look at support and resistence levels, don't get caught without a CLEAR plan on any and every trade (I've made that mistake a few times lately myself, it happens) and the problem is that the moves can be so erratic that we get caught off guard. Typically I can just trade on the so-called "fly" but now, in this market? I need to adjust or get snuffed!
Good trading, say a prayer for our fellow comrades in Japan and around the world, we are after all all part of the human race and we all bleed the same.
G-D bless and G-Dspeed to all and RULE!
Michael "Waxie" Parness