Gap and Fill

DPR Action: Exit at market open

I was close to sending out an emergency exit signal intraday today.  The Nasdaq got the heavy brunt of the selling, and had it broken the low of $70.10, I would have been looking to go flat.  As it happens the low survived into the close, but the system is still showing a sell signal, therefore I will be exiting at market open.  There is a possibility this may finally be some real selling now, giving me the chance to get in at a swing low that is bigger than a 1-2% drop from a high.

I accept that I can’t be right all the time, and a gap up, forcing a quick fill higher than hoped, followed by all-day selling to fill that gap is hard to avoid.  This is what I would call a classic whipsaw trade.

Never the less, there is a possibility of a counter trend move higher as it bounces in after hours trading and overnight, so it may not be that big a hit come morning.  Right now it is underwater by -3.5%, so let’s see what tomorrow brings.

However, as my system risk controls dictate, as of tomorrow morning, I will be out again at market open no matter what the overnight does…then I will look to go bottom fishing.

My best,

John