I have noticed a change in the game this week. The flag, wedge and other consolidation patterns on momentum stocks are beginning to fail and reverse quickly (Look at MED.) Further, I began to see a number of large sell orders flashing on many of the stocks that I am long. These orders sometimes disappear quickly without getting filled. I have also been noticing “Dancing Orders” that never seem to get filled (I didn’t see them on the print.) One dancing order trades our of the CBOE and it is usually a pair of 1000 shares above and below the current price action. Another dancing order comes out or BOSX and it is usually between 2700 and 3300 shares also both above and below the current price action. Today I didn’t see the bottom pair of these dancing orders on my screens. Only the top side putting down pressure on prices. Maybe this behavior is only experienced during options expiration week. If this is the case, those orders will disappear on Tuesday from the market.
One thing I have written on my journal is that even though the right trade this week, for many of the stocks I watch, has been to sell the rips I failed to do so. I recognized that action both on the charts and the tape and yet I failed to pull the trigger. Yes I know the market is in an up trend, but never the less I should be trading what I see.
One good adjustment I made this week was to lower my price target expectations and used tighter stops. I was able to minimize losses and still lock in some gains.