TF Trades 2/2 - I Sat

Profit: USD 330

TF 5min

TF Hourly

Sold TF at 439.7

I did say that if TF were to go below 440 before US market opens today, I will short it.

And so I did. Set a stop at 432.6, and profit target at 433.

Then I watched. Twice I let 2.2 points vaporize before my eyes. I sat. 439.5 was stopping TF and a downtrend line was threatening to stop it. Too bad the trendline was at around 433 and at one point I suspected that TF could go all the way up to Fri's close at 443.2.

Then D called. He couldn't believe I didn't take profit and started selling me the idea of an early exit. He has been spoiling me - I hate losses, no matter how small, and he's concerned that I'll take it really badly should my profit turn into a loss...

Anyway, I didn't let him finish, and told him that I had to do this. I have to sit when there's no reason to get out yet. And if I'm wrong, that's fine coz it's just going to take me 3 points to know that. I'll take the small loss. I just have to start trading my view again. The way that I've refused to take losses has worked in the past, but it's hurting my trades in the current market.

Back to TF - As it entered the demand area, it was apparent that it would be a difficult way down for the bears. But it was also where opportunities for good momentum can be found. D then asked if I could take some profit first then go back in again. I said no, coz I've reserved a good seat, and if I get up, I'll miss the show when it starts.

And so I continued to watch as TF hit 437 support a 3rd time on 5min.

I checked the Europe and Asia market and both were NOT looking good. US is going to be releasing personal income and spending, and ISM data in a few hours, and consensus is showing a fair bit of pessimism.

So far so good.

The market's not going to plunge because of more bad news of course.

In fact, I was thinking that if things get really gloomy today, there's likely going to be folks who will start bottom fishing - with DOW trading just beneath 8000, a pullback is not too difficult to imagine.

As I was going back and forth with the 2 scenarios in my head, I noticed that TF was forming one of those long bearish candles on the 5min. I didn't like that. It was reaching the floor of channel too quickly. I needed it to come down gradually so that by the time it hit the floor, it would be somewhere around its previous low at 432. I checked the hourly, and saw the 435 support. Dangerous number.

And indeed, as soon as TF touched 435.5, it bounced back up quickly. That was a sign to get out. I covered with a stop at 436. No transactions took place there. TF went offer at 436.4 and I was out.

TF is currently trading just above the floor of the channel on the 5min, and what I'm looking at is clearly a descending wedge. Given the 435 support, I'll be cautious about trading a breakout below the wedge. If it doesn't fail, I'll take a short entry after a pull back to either the base of the wedge or at 437.

I might take scalps if I have reason to believe that TF is going back up to 445. But I would really need my Tick indicator to do that. If it gets choppy, I'm staying out. If I don't, I'll be the biggest ass I ever know.