11.14 - 75

Yesterday was all about being aware of pivots, being patient and scaling in.

Daily

Yesterday's candle was very bearish but can also be seen as a move to take out the previous bull gap. We're still holding the highish volume hammer and the previous quarter close and D48. We're still positive on PO with a squeeze brewing. Structurally we're still bullish and currently going to retest support. Yes we may break down, but the trend is still up until it's not. On /es it look a little but more likely we break down, but again we won't predict. We will wait.

4h

We are very much bearish on spy 4h. We've yet to hit the swing 618 which is very much still in play. It feels like that would be the extent of a down move in the short term given we're at such extreme levels on the PO. This morning we have tapped the previous bodies of the tweezer bottom leading to the daily hammer. So this could also be the extent of it here. We will wait. Point is bearishness, but currently extended from the ribbon with a HTF bullishness. Potentially could take some narrow stop call swings.

Hourly

We're going to open with a pretty sever gap down. Gap fill could be an interesting play back up to the ribbon before evaluating further downside or full on reversal. We've tapped the downside 382 which puts the 500 and 618 in play. Again, the -618 would put us just below the bottom of last weeks scary hammer. We've had several PO dots without the mean reversion. If we're putting in a swing low now it'd be doing so with divergence.

On SPX it looks like we're set to gap down below the MD put trigger and would be very extended from the ribbon as well. Perhaps a reclaim of the MD put trigger takes us back to PWC before settling on direction. I will not chase puts at the open, I will miss the move on puts until we're back closer to the ribbon with several 10 minute rejections. Can I wait long enough for a true W with divergence - 10 candles between pivots.

An entry for puts requires a big pullback to the previous swing high or 70% of the move down. We may continue down and in that case I will simply miss the move. All good.

PO at extreme levels trying to put in a divergent bottom.

10m

Trend is very much down with deeps moves into the ribbon getting sold. We have put in a LL with PO HL and PO dots suggesting a move to the 21e which we're essentially getting now. -1 ATR currently support with the 786 and then 618 as resistance. No real reason to consider calls until a clear breakout above the 48e. Closing the gap would take us all the way up to the put trigger. So, plenty of room still higher if the 48e breaks up. Given how extended we are from the hourly and 4h ribbons I wouldn't expect too much continuation down, but certainly more likely. Just need an entry in the ribbon!

Bias is very much down. 10m8e has continually rejected. 21e may be a good spot to short as it also lines up with previous support turned resistance. Calls only below LOD is tested. And, only for a scalp! Downside is better. Be patient.

If open near 6670... 6690c, 6700c and 6720c in play. Downside is 6660p and 6650p.

6700c ribbon is narrowing and 21e is flipping green. 6650p is already very much bullish and potentially looking vommy.

We tanked off open. Which I had plenty of justification to get into given how the 920 10m candle closed. A clear loss of the ribbon, using the candle high as SL would've yielded a nice move down to LOD and then some.

Once we did make it to LOD however I started looking at the call side. Remember the higher time frames suggested we were very extended and would benefit from a rip back to the ribbon. The extreme and quick move down likely caught put chasers offside and then we ripped back. I didn't take the calls. I didn't have a setup slash I wasn't confident.

We then ripped to put in a really meaningful hammer.. Two things led me to take calls. 1. the huge wick that solidified divergence. 2. Seeing the 3m21e flipping and acting as support. 3. Having a very clear stop loss of a loss of the 3m21e. I scaled in, added late/exited early, but still profited more than enough to call it a day.

I like this pattern of scaling in small. Adding size with greater confidence yet still taken profit quickly on the larger sell just because there's no reason not to. And, then letting the original scaled in position run to the predetermined target. It accomplishes both things. Getting better at waiting for targets to hit, while still capturing a meaningful enough profit in the short term. Or maybe it's vice versa - by taking the quick large profit, I then let the smaller position actually run or stop.

Still need to work on position size. But, in this case the larger tranche was a tighter stop and tighter exit. Long term I will scale up on the scale in and grow the confidence to hold until target.

Really solid week despite an absolute stupid and emotional sizing decision on Tuesday. I recovered but I didn't need to take on that much risk to begin with. My win rate is great. 10 trades. 8 wins. 2 losses. Port up 10.5%.

Next week I will continue to be extremely patient from a price structure pivot standpoint. I will scale in and add only if my thesis remains in tact.