I wanted to write a very quick update; the market is set to open down -0.8% as I am writing this. So what does this mean? Well firstly, don’t panic.
1. Keep in mind to stay true to your analysis and your stops.
2. This may be an instance where you need to revise your positions, but don’t jump in and out of trades and let yourself get whip sawwed.
3. What could the market do in the next couple of days to weeks:
a. We could fade the gap on open and erase this loss, but I don’t think that is likely.
b. We could be forming a channel and start to trade sideways.
c. We could be in an ABC correction.
I think ‘b’ and ‘c’ are equally likely while ‘a’ is less likely.
There is nothing wrong (if you are a short term trade) to take your profits and wait for the market to choose a direction before getting back in.