If I were a day trader

I would be a big pain for me today if I were a day trader!


The positive surprise from the Summit may likely push it further to the upside extreme. In this kind of extreme, it is always wise to be cautious for the near term upside limit. I'm certainly not changing my mind about the potential for a Melt Up to be seen in 2019, but I'm worried about the next week or so bullish behavior of the market and would question how far it can go without coming back first. If you follow me, DON'T CHASE HIGHS FROM HERE! 
This was what I said last Sunday and sure enough S&P mounted a free drop on Tue as soon as it touched 2800 briefly on Mon. Apparently it was not enough for the Market God to punish those who chased highs as it mounted another 70+ tank for S&P most of day yesterday. Then miracle happened as buyers came in to buy when S&P retested its Oct low around 2630 and by the end of the day, it almost recovered all its earlier loss. The market sentiment has quickly changed from extreme high on Monday to extremely low on Thu and I started to become more bullish when it tested its lows. So I went in to get long for SPY yesterday when it dropped like a stone and I was pretty happy as it almost immediately turned to green by closing. Too soon unfortunately! The initial good reaction to the job report this morning turned out to be a fake one as the market has quickly turned down and never looked back. By the end of the day, it lost all its recovery yesterday and retested the 2630 low again. I could be killed if I were just doing day trading today with yesterday's longs. Fortunately I was not.


While it feels quite bearish again with today's big selloff, I feel more bullish again short term. Although we are still facing a real possibility of the breach of the Oct low, which will then bring the 2600 support into play and then the 2580 as the next line, I think the risk to the upside is more likely. Holding off the 2630 support twice this week was a good sign by itself; more importantly the volatility index VIX is sending another buying signal. Today's hike of VIX has made it closed above its upper Bollinger Band. This has been a very reliable buy signal when it comes down within the bands. Not necessarily immediately but I think this will come soon likely next week. If so, don't be surprised to see another 100 points jump. Remember, in this high volatility market, the mood can shift between extremes just with a beat of heart!