Shared by
dpaleo
Tags:
was looking for a BTFD on shakeout below SPX 4000 and got it. Early with 1st entry and missed remount of $399 but bot 1st dip back. Nice trade. Obvi wish I held better with big picture in mind.
Execution detail:
| Date/time | Symbol | Qty | Price | Position |
|---|---|---|---|---|
| 2022-07-28 10:23:58 | SPY | 500 | $398.780 | 500 |
| 2022-07-28 10:26:57 | SPY | -200 | $398.190 | 300 |
| 2022-07-28 10:26:57 | SPY | -100 | $398.185 | 200 |
| 2022-07-28 10:26:57 | SPY | -200 | $398.180 | 0 |
| 2022-07-28 10:43:13 | SPY | 300 | $399.370 | 300 |
| 2022-07-28 10:43:16 | SPY | 100 | $399.320 | 400 |
| 2022-07-28 10:44:31 | SPY | 100 | $399.750 | 500 |
| 2022-07-28 10:48:30 | SPY | -100 | $400.830 | 400 |
| 2022-07-28 10:49:42 | SPY | -50 | $400.970 | 350 |
| 2022-07-28 10:52:30 | SPY | -100 | $401.080 | 250 |
| 2022-07-28 10:56:42 | SPY | -50 | $401.210 | 200 |
| 2022-07-28 11:00:06 | SPY | -50 | $401.610 | 150 |
| 2022-07-28 11:01:54 | SPY | -50 | $401.730 | 100 |
| 2022-07-28 11:02:43 | SPY | -50 | $402.040 | 50 |
| 2022-07-28 11:07:50 | SPY | -25 | $402.100 | 25 |
| 2022-07-28 11:18:03 | SPY | -25 | $402.430 | 0 |
Comments
dpaleo
coming into day my thinking was as follows: now that event (FOMC, big earnings) risk is behind us with no FOMC in August, and funds drastically underweight equities, there could be a chase higher as they all need to buy stocks or risk losing their jobs is they miss any kinda rally (see: FOMO). Mkts should have a tailwind as implied volatility gets smashed. But what everyone was talking about last night was the day after big rally Fed days have been huge selloffs. So with everyone thinking Fed day rally was gonna get sold, I was happy to see mkt get sold off open leading those people to think, "I knew it." This shook out weak bulls and got shorts to chase down. Meanwhile, i m thinking that SPX 4000 should be spot that those funds that need to buy would love to get long. And buyers clearly showed up just below SPX 4000 (SPY398s). It worked great. But obvi wish I just held on given my longer term big picture.
AndyBhanver3
Hey dpaleo, I saw the same thing, over on twitter everyone was saying after a rally during fomc we are followed by a sell off. I went back to look at the prior 4 fomc and typically the following days were followed by "corrective moves" either a sell off from the rally or push up from a sell off, I wasnt biased but I was thinking it was a sell off day after the opening dump from 403 down into 398, I was curious on if you could go a bit more into detail about funds being underweight equities and buying at that price area? as that didn't cross my mind and would love to understand a deeper level on why the market held and bounced back around that price area, only thing I noticed was a retest of a daily downtrendline at 398, but that is more of a technical aspect, and as well as how you learned to trade? I've looked back through many of your trades even back from 2013 that you have shared here, and I see some really great performance, I was curious if you were ever trained in a prop firm or something of that sort?
Most institutions spend the entire year de-grossing which is why we saw so many of the shitco tech companies down 70-80%. Hedge Fund cash levels are now so elevated. AAII sentiment has been so bearish. All these things point to a chase higher. I used SPX 4000 as support level short term given the options positioning that week.
I've been trading at a prop firm since 2014
Thanks DPALEO! Super understanding, thanks for breaking it down for me, and awesome to see it! 8 years going strong, and I was just curious on the prop firm question, thanks dpaleo, much appreciated!
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Hi dpaleo, what made you buy the dip on 398 and thinking it was going to reverse to the upside?
Was it pure technical or did you base it off of playing the fomc rate hikes being 75bps?