Bad news is I closed out of this trade with a loss. I had bought the SPY Mar 232 Calls for $2.00 and sold them today for $1.18. I sold because just before the close at 4pm ET, there was a bearish engulfing candle and a close below the 8ema. You can see this on the chart above. This is a bearish candle signal and the prudent thing to do is to exit and take the loss, rather than hope and pray it turns around tomorrow. Chances are it will continue down, and maybe even gap down at the open tomorrow, and the loss could be much higher. You must be willing to take controlled losses when trades don't work out, because they don't work out all too often.
Good news is that I followed my discipline. Which, after 6 years of trading, still is not easy.
This chart is a good example of the Halfway level of a measured move providing resistance. See the short white horizontal line, like a hash mark, across the middle of the vertical thick white line? That's halfway up the measured move to the anticipated target. See how that Halfway level held the candles from closing above it? I see this quite often.
Well, tomorrow is the Trump inauguration as well as option expiration day. You'd think the VIX would be higher, but it closed the day at only 12.78. It will be interesting to see what happens.
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