Mean reversion in play again

The same playbook that worked so well last month is playing out again. Quite a lot of parabolic moves appear to have climaxed last week. Last week I traded TBT to short the parabolic move in TLT and BTU and ACI on the long side. I am looking to fade any rally in GLD as well. The combination of very steep price action with increased volume is a high probability topping or bottoming signal. But I am not willing to stick my neck out for more than a day trade due to the increased volatility and price expansion.
My plan this week is to sit tight the first half hour of trading to and see if a trend develops. If it does, I’ll enter some day trades with tight stops.

About Stock Trade Journal

The information in this blog is not investment advice. Please consult a financial advisor before investing. I have been trading stock since the 1990's and survived the .com crash. I am developing software applications to help me trade better and now I am making them available to help other traders. This blog is also a way to share my experiences and observations in the market.
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