Once again, I find myself on the other side of the fence. I entered a short at 10:42am today thinking the gap up is unsustainable. Well, not only has S&P500 broken 800, it's now resting above 820. Goldman Sachs (GS) was about 106.50 when I entered the short. GS closed at 111.93 today. I'm down \$210 already. If GS can stay above this 200 day MA at \$110 later tomorrow, then I'm out.
[caption id="attachment_1125" align="aligncenter" width="500" caption="S&P 500 ETF"][/caption]
[caption id="attachment_1126" align="aligncenter" width="500" caption="Goldman Sachs"][/caption]
As you can see, GS went vertical upward once it broke the morning resistance at \$17.30. The reason for my entry in the morning was because GS seemed like it was having difficulty breaking \$17. Furthermore, S&P 500 also seemed hesitant around 800. So I guessed it'd be reasonable to see a pullback.
However, I failed to take into account today's humongous gap up open. It would have been counter-productive if we're to close the gap on the weekend's hype up. This is pretty much a reverse of what we've seen seeing for the past few months. Panic begets panic. But in today's case, it's panic of missing the rally train that'll fuel this possibly new leg of a rally.
My second mistake is trading on lack of information. I traded using the mobile platform and by just looking at the Google Finance charts. If I had access to my intraday sentiment chart, I could have easily seen that the morning momentum remained strong even when S&P was stalling around 800.
Lastly, I really should stick to my own analysis and not trade on a spontaneous urge. I did say in the morning that we'll break down if we fail to maintain 800. Even at the time of my short entry, we were indeed holding on to the 800 zone. Thus, I have basically shot myself in the foot for not listening to myself.