Will We Get 3 Down Days in a Row?

Watch for Fed Speak headlines today

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Our View

Yesterday, I changed the lean again — and you know how that goes! 

It was supposed to be “sell the early rallies and buy the pullbacks” and I changed it to just “selling the rallies.” I don't know why I did that other than I looked at the ES and it was down 40 points. I lost yesterday and I kept selling even though I posted the buy stops just above the VWAP.

The thing about this is, I base everything off a feel for the markets and the 3-day rule,  which says you can get the ES to close down one day, maybe two days but three-day declines are hard to come by — especially in this environment. 

I did a poll on Twitter titled “What do you fear more, being caught short or long?” 

Most respondents were in-line with my vote — being caught short when the markets are going up.  

Yes, the markets have been going down — they should — but yesterday's trade was tough. The ES dropped after the open as the NQ fell, but late in the day you could see my short trades were profiting early, but late they were not giving up to the downside. It’s like it ran out of selling pressure and even rallied after the imbalance showed over $2 billion to sell. 

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