Well, then never mind. SPY gave me a decent entry for a call so I took it. See chart:
I told myself that If I had a great profit, I might go ahead and hold over the weekend, but if it showed any weakness, then I would bail out. And that’s what I did. Trade specifics:
September 29
Call 436
Entry: 1.43
Exit: 1.95
Profit: 0.52 (36.4%)
Looking at the chart, it appears that I made the right call. I should say that in my world whenever I see prices not moving much, but going slightly upward, I always feel like the next bigger move will be down. Likewise, when prices are not moving much, but going slightly downward, then I feel like the next move will be up. This is based on nothing but my feelings. I have no authoritative text to point to that justifies my feelings, I just do.
Now, if SPY moves below the low of the day, this may set up another call, but at this point that would be over the weekend and I’m not so sure I would want to do that on a brand new position. Of course, having said that it is sure to gap up on Monday. (Because that is what has been happening to me lately!) 
Okay, so I succumbed to the emotional pressure and entered a call a bit more than 5 minutes before the end of the day. Same contract, Sept 29 Call 436 1.35.
I was watching the 5 minute chart and noticing that there was a positive divergence. But a divergence on a short intraday chart doesn’t necessarily give you confidence that a reversal will have any legs. 5 minute divergence has more meaning than 1 minute, but not as much as 15 minutes or 30 minutes. 1-hour or daily charts give you more confidence, but the problem is that those long charts really don’t give you enough signals to trade on a day-trading basis. During the day I typically watch the 5-min chart and keep an eye on the longer time charts so I get a feel for more general trends.
On this particular end-of-day entry, I checked the other charts and found that there was at that exact moment an entry point with positive divergences on the 5, 15, 30, and 60 minute charts for both Chande and RSI, and also on the daily chart for Chande (but not RSI). It is actually pretty rare to get all the charts agreeing at the same moment. The following are the charts for 5, 15, 30, 60, and daily.
Now I have every single chart agreeing that an upward reversal is likely, but you know, you gotta always remember that anything can happen. Given my recent record, I suppose that it is now fairly likely that we will gap down on Monday.
I guess I will say that this principal helped me to get out of my call before it dropped, but in the longer term, charts prices are edging slowly downward which in my world, according to my unscientific feelings, suggests that the next move will be up.
At least I hope so!
Yes, well we did, but not enough to knock me out and we promptly bounced. I got nervous a few times today and almost bailed out on weakness, but we closed strong to the high of the day and I’m still in. I’m thinking that I will be closing this trade either tomorrow or the next day. (More likely tomorrow)
Yes, well we keep creeping downward since 9/21 and I still think that we are due for a bounce, but I may not have correctly predicted when. I’m still in 9/29 calls.
Well, I got clobbered on this one. Near the end of day I doubled down bringing my average price to 0.80 from 1.35, and I was hopeful when we gapped up this morning, but after consolidation it broke down a little after 10:00 and I feared continued weakness so I was out for -0.63.
At noon around consolidation around yesterday’s low, I entered a strangle. 10/06, C435 1.05, P414, 1.50. We are currently down from that point. If I can close the puts for an overall profit I will do that and hope for that bounce that I have been calling so that perhaps I can profit on both sides on this strangle. I do not think that this strangle will be a day trade which is why I picked 10/6.
That would be -79%. One of the things that killed me here was that I was forced to play this as a multi-day trade due to day trading restrictions on my small account. This forced me to play it a lot looser than I normally would have done. Granted, even if I played it tighter, I still would have lost, just not this bad. Basically, I need to either increase my account value (which I probably won’t do), or be more picky about the trades that I enter. More than likely I will have to again lean towards multi-day strangles rather than straight trades.
Okay, so the 2pm bounce we had today may prove to be the start of the bigger bounce I was waiting for. The problem, of course, is that my calls expired this Friday so every day at this point I lose a lot of premium. When you get this close to expiry, you can almost watch the premium evaporate in the intraday prices.
The thing about expirations is that if you are playing for very short term movements, then the profit you can make given the same movement in the ticker is much higher with short expirations. You can play for longer term with months-long expiration dates, but then the premium is a lot higher and you need even more movement in the ticker price to make a profit. If I’m planning a day trade, then I might pick a zero or 1 day expiration, but more likely a few days just in case I need to hold overnight. But most often I am trading for days and I’ll go with a week or two just to give me more options. I only go for months if there is something specific that I’m trying to do, like my NVDA puts where I was playing for a trend lower rather than an immediate result.
On my short term trades, I only use stock options. I never go long or short on the actual stocks, mostly because the leverage (profit potential) is many times higher using options. Options are available in any brokerage account and they are not very complicated to learn how to use.
Looks like that bounce I was predicting is here, just a bit late for me. 
This does not change my overall bearish view on the market, and I still expect us to hit lower lows. Hopefully this happens in time for the other side of my strangle.
We had a nice setup today for a SPY Put. Too bad I totally missed it. The setup was clear on the 10-min chart that I looked at after the close today, and I only looked at it because I wanted to see a longer period than just today. Every day I largely concentrate on the 5-min chart and while it showed a setup, it wasn’t quite as clear. Anyway, here’s the chart:
As you can see, in the morning of 10/10 (far left of chart), SPY had a nice upward move that was largely orderly which is what you like to see for bull moves. When it came down late 10/10 and early 10/11 the action was more volatile with longer candles which is what you expect for bear moves downward. Late 10/11 it had another very orderly up move with shorter candles. Starting today 10/12 the action became more volatile. All morning, the candles were very long. When you look at it you need to pay attention to the whole candle including the tails, not just the colored part of the candles. Even though it made a higher high a few times today, it was not very orderly. Higher volatility is indicative of bear markets, but it is also indicative of tops (and bottoms) prior to a reversal of trend. This is the first clue that a reversal downward may be coming.
You can also see that as the price was making higher highs, the oscillators on the bottom of the chart were making lower highs. This is a divergence which indicates a higher likelihood of a reversal. It indicates that the buyers are losing steam. The action just today (10/12) was a 3-point divergence (3 tops), but there was also a 2-point divergence from 10/10 midday to the very same point today.
A 10/13 SPY 435 Put could have been bought for 1.00 and paid 4.00 for a 300% profit.
I suppose I could have said that I made a huge profit, but as I said, I totally missed it. Maybe some of you caught it…I surely hope so. Oh well…
FWIW, I’m thinking that this little bounce at the end today is not going to last and we are headed quickly to a spot lower than today’s low. Looking at each of the “Magnificent 7,” they all look like they are close to consolidating for a move down. Futures are a bit positive, but not enough to really matter.
For anyone watching early tomorrow, watch for the big banks reporting earnings before the market opens for pre-market movements. It’s been tough for banks, but maybe this is already baked in. We shall see…
SPY up nicely this morning after a gap up, but trading basically sideways since 11:45 to now (1:00). I don’t see a great setup for either call or put, but when the volatility is squeezed this narrow for so long, I expect it to move more significantly one way or another. So I entered a small strangle on SPY:
10/20, Call 442 $0.77 and Put 429 $1.00. $1.71 total, one contract each so pretty low risk.
Okay, so the following was my thinking on this trade.
As many already know from other threads on this board, I have been looking for a put trade, ideally on a weak Mag 7 stock that I would enter as SPY was looking like it was going down. The idea being that if SPY is going down, then a weak stock will go down even more. But the action this morning had me thinking twice. Looking at SPY, it traded back up into the 9/21 gap that it had not yet fully filled. SPY met resistance on 10/10 and 10/12 and turned down further each time. This made an odd chart pattern. SPY was up from the 10/3 bottom and began to form a flag consolidation which is normally bullish, except that the flag was not right. Most flags are either parallel left to right, or are triangular starting wider and getting narrower going right. This one starts narrow and gets wider as it goes. Normally you think of a flag consolidation as a reduction in volatility where movement slows down for a while before continuing up (or down). This widening flag is actually increasing volatility which is not right for continuation. To me it feels like a reversal which reinforces the bearish bias I already had.
Here’s a 60-min chart that shows enough time to see the general ups and downs:
As indicated on the chart, I consider the up move from 10/3 to 10/10 to be volatile and bearish. A lot of people would say that the action on 10/6 and 10/9 was volatile only in that it was strong up and that is obviously bullish, not bearish. But as I’ve said many times in these threads, I disagree. If you move up too strong that can definitely be viewed as bearish. The action today was another strong up move, but it was stopped again in the middle of the 9/21 gap. SPY has now put in multiple tops basically in the middle of the 9/21 gap while putting in a 4-point+ negative divergence on both oscillators. Ordinarily, you want to have higher-highs in order to truly be divergent, but relatively equal highs can be viewed as a double or triple top which is also a valid reversal pattern, so this divergence is valid. My prediction is that the price moves down eventually below the October lows.
But I could also be wrong. SPY could also be consolidating this afternoon for a break above resistance. If it breaks resistance, it could fill the rest of the gap (which is not much more) and keep going up another 10 points. So I decided that the safest play, especially given that I had to leave for a while this afternoon and wouldn’t be able to watch it, would be to enter a strangle which is what I did as I posted before. This chart shows my entry marked as “S” for Strangle. As the chart shows, we didn’t get any significant moves this afternoon so I’m holding. I’m hoping to be out within 2 or 3 days, but a huge move tomorrow morning that gets me out in a day would be just perfect as far as I’m concerned.
I should also say that in addition to increasing volatility, the volume on this flag is also all wrong. When you are consolidating before continuing your uptrend (or downtrend), the volume is expected to decrease, NOT increase. On my chart, you can see that the volume from when it started the morning of 10/10 has been generally increasing which adds to the feeling of volatility. No matter how perfect your chart pattern looks, if the volume is off then this throws into question how successful the pattern will end up. Even if the pattern was better with a classic parallel or triangular flag, if the volume is not right then you really have a lot less idea of where things are going.
I’m still in. I didn’t get out of my puts on the gap down this morning, hoping for more profit on the downside, and I sat through the rally to positive territory. Currently, SPY and all of the Mag 7 are setting up for a negative divergence which means we could start a reversal soon. I’m considering taking my call profits and hoping for another downdraft to make a profit on the put side. We shall see…
It appears that you were actively trading options on SPY with a short expiration of September 15. You executed 12 trades, which involved 6 round trips, where each round trip consisted of buying and selling options. Your choices varied between call and put options with different strike prices. You noticed that shorter expiration times often yield better profits for the same price movement.
One notable point is that your final trade was more expensive, as the price had risen, but you had more capital to invest. However, you experienced a stop-out due to unexpected selling pressure at the very end of your last trade. You’ve learned that exiting a position in the last minute or two may be a wise strategy in such situations, as the final market movements can be challenging to predict.
Some movement today. As I said, there wasn’t enough profit for me on the gap down. Had it given me one more lower low witha positive divergence I probably would have closed that side, but as it was I ended up riding it all the way up to the high of the day and feeling sorry that I didn’t close the put side. At the top we had a clear negative divergence, not only on SPY but on all of the Mag 7 I got out of the call side just after the top for 0.92 on a buy of 0.77 for a profit of 19.5%, but that is only on the call side. The put side profited on the way down, but I have not yet closed it because my overall feeling about SPY has not changed due to the action today. I feel like we are still volatile and still headed further down. I will likely close the put side tomorrow or Thursday at the latest.
Here’s the updated chart:
Okay I’m out. We did go down further today and SPY set up for a 3-point positive divergence so I got out before it could bounce. Here’s the chart:
But of course, as it always happens, SPY went down even further on the very next candle but I see it is now up a bit higher than where I closed. I’m satisfied. Data on this trade:
10/20 Put 429, opened at 1.00, closed at 1.21, profit 21.0%. For the entire strangle cost going in was 1.77, closed 2.13, profit 20.3% in basically 1.5 trading days. I was hoping for a bigger gain more likely on one side of this trade, but I ended up profiting on both sides which is actually rare on a strangle.
