Today is one of those days where I dont realize how important it is to understand macro technicals and I paid a large price for not realizing where the macro momentum laid. I cant really emphasize how important it is for me to just constantly be remembering and reminding myself that the macro picture is always the #1 and when we are in the opposite of that structure in the micro form, then there is potential for massive home runs days. These days are extremely rare but when they occur you can expect anywhere from 8R-10R on pretty much any trade with the trend. I recognized this way too late in the day. 

1d:2m (Webull Trades) Trend Reversal Short

    - Doesnt look like a bad trade does it? I took a large piece of the move so far on the day. I basically shorted near the high and sold right at the low of day. Well look at this chart:

    -See those tiny arrows at the top of an 8 point drop? yeah that is my trade.

How did I miss this opportunity?

    Somehow I didnt notice or understand the potential downside. Lets go through the original though process:

MACRO- Downtrend

1yr:1d

    - When the market is in a macro downtrend we should expect consistent lower highs and lower lows. If you look to the right of the chart you can see that the last lower high was not followed by a lower low. This means that we could enter a ranging market. When you have lower highs combined with higher lows or higher highs and lower lows then you are in a ranging market. Ranging markets do not continue in one direction strongly most of the time. They do eventually breakout but not after many attempts at the bottoms and the tops of the range first. When in a macro bear market that is ranging, the best trades will be to the short side. As you can see up here there are not many times recently where the SPY broke down from the top trendline in a slow manner. The first 2 lower highs slowly fell off then accelerated about a week later. The 3rd and 4th lower highs really are getting sold into heavily. I should have noticed that the last lower high was a big fakeout to the upside and this one was probably going to be another large drop and or fakout to the upside. What is the next step?

MICRO-  Uptrend

1yr:1d

    - Once the macro is confirmed to be in a downtrend then we can find areas throughout the downtrend where the selling slows and we create small uptrends within a larger macro backside move. These green areas are all of the uptrends since the beginning of the bear market. If you look closely at them you will notice that in the beginning of the year they were quite vicious to the upside and the slope was very strong. As the year goes on you will notice they get less and less powerful. See the most recent last 3 uptrends, they are weakening more and more. When in a micro uptrend within a macro downtrend, it is imperative that you are always ready for the next lower high to be formed. That means when the market seems extremely bullish and everyone is screaming breakout, maybe its time to look for that next big move down. I know its so hard to not fall into the trap of seeing everyone say BULL and everyone is wrong every single time but these large drops are truly where the money is made and when they occur it is extremely important to capture them. 

    How do we find these?

30d:30m

    -This is the micro timeframe on which already confirmed from the daily view. We can see consistent higher highs and higher lows. Today I was waiting for the breakdown and a failure to create a new higher high which is exactly what happened. The market failed right at the new high attempt. You can see that once we broke the micro trend we got absolutely demolished and crashed down a full 3 days of very grindy gains. This is how it always ends when we are in a macro downtrend. These uptrends break and accelerate very quickly because too many people are bullish.