I woke up to a dream today and it was the market! If you are a short-term trader then it is time to start brown bagging your lunch if you haven’t already. Today’s final 80 minutes of trading provided as much opportunity as you see in an entire trading day. This followed the meltdown we saw yesterday in the final 30 minutes.

As I often say to our traders in the AM Meeting during this kind of market “Don’t get taken out of the game early.” In other words, if you don’t hit your daily loss limit on the Open you are probably going to have a pretty good day.

There are three basic ways to make money in the market right now.

1) Be aggressive on the Open above/below important SPY levels
2) Identify the strongest/weakest stocks during the Open and be in them when they break later in the day if the market breaks in the same direction as the particular stocks
3) Make the much wider spreads that are being offered

Take a look at the intraday chart below of GS. It showed relative strength on the Open and when the buy program was turned on at 2:40pm it broke above 140 resistance. This is an example of #2 above.

#3 is really only for traders who have been trading for a minimum of three years and can identify real buying/selling on the tape. But if you have that skill then AAPL was certainly a lot of fun in the final 20 minutes.

An example of #1 was shorting the SPYs below 104.60 at 9:40AM this morning. It didn’t lead to much of a down move but you want to take that trade every time because in a fragile market the bids can just drop out when a key support level breaks.