When people say "I hate to tell you I told you so" what they mean is they are loving the fact that they can. In my previous post I was wrestling with what to do about the significant reversal, and I mentioned "I've seen many trades that do a quick 50% reversal, then resume the original direction." Hello :) Check the chart of today's action shown above. That's exactly what happened. So, at the moment I'm happy with how I handled last Friday's adverse move. But of course I wish I hadn't exited the second position. That's just a wish. I think I did the right thing by taking off half our position and cutting our risk while preserving a core position to benefit from the resumption of the trend.
The Nat Gas market wasn't completely closed yesterday. It was open until 13:00 ET. Not sure if that makes a valid candle or not, but when combined with Friday's candle they make a Bearish Harami candle pattern. Then today we continued the drop and closed below the 8ema, 20sma, Head & Shoulders Neckline, previous swing low, and the 34ema. This is a relatively large candle and with good volume, so we seem to be back on track to our target.
There's the question of whether to add to our short position. Being that this is a large sudden move, I think there is a reasonable chance for a partial retrace overnight and maybe into tomorrow. I'd like to wait and see if that happens. If it does we can add a position at a higher, more advantageous level. If it doesn't, we'll see if there's enough room left to our target where it makes sense.
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