I forgot the ASX wasn't trading today... eh
Anyways...
I was going to play the "Red to Green" reversal strategy again today that I had previously talked about on Monday.
US session had another big drop on Monday night but then we had 1 days holiday from trading. (similar to a weekend break)
There was no substantial news flow today/yesterday to push the index lower.
I expected a decent 5%+ drop on open on the bigger volatile Tech names after the big downward move on Monday night in the US.
I was then looking to go long after the initial drop once these stocks formed a bit of a base or reversal candles.
Obviously I couldn't do this as the ASX was closed but as we can see from the ASX200 Cash futures, this trading strategy would of played out again.
Shorting stocks or indexes is so hard because there are always be big relief rallies along the way down.
My overall view is still bearish and I will look to short/fade any decent rallies.
This strategy could/should still play out on many ASX opens when we are this heavily oversold from the new downward trend move.
This heavily oversold "Red to Green" reversal strategy seems to work best after a break from trading e.g. public holiday, weekend.
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