Hindsight is 20/20: 1500 points in the Dow and 201 Handles in the S&P

  • Posted on: October 17, 2014

I felt yesterday we’d get the last 200 points in the Dow futures we needed to get that 10%. I was wrong. A couple time we sold the market and then were stopped out for losses on rallies. In this environment, I believe options are better risk reward than the futures, because of the volatility created by hft programs. It seems no matter where you put you stops trading futures, the worm programs will finds you . 2 ticks or 102 ticks, they will seek you out. The options allow you to take a position and not get stopped out. Moving forward, I have made the recommendation to use 80 percent options for that reason. Hindsight trading is always 20/20. Realizing the changes in the market flow demand a change in the trading strategies. For the December S&P: 1890 is a 38% retracement of the 201 point drop. 1914 is half way back. For the December Dow : 16340 is 38%, 16,523 is half way back of the 1,510 point break