8/19/2007 – Interesting week ahead, I’m short-term bearish

Huge week last week. There was lots money changing hands last week. A very good week for me. 18% increase in the accts I trade, including one acct which doubled in value. The secret for me was to not try to guess direction. The swings were violent as the VIX was way up.
Weekly VIX since 2002

The Vol spike has led to most of my gains. Absolutely incredible action in the volatility. We haven’t seen levels like these since 2003. I don’t think we are out of the woods yet. I think this week should lead to another spike.
The next 3 index charts show similar things… we are hitting 200MA resistance. Most of the large financial stocks I follow gapped up huge, and then closed below those opening levels. This strikes me as bearish, especially since the Friday Expiration volume was 36% less than thursday. It should have been heavier if it were to make a bull run. I will not enter any new longs until I see more confirmation. I do see a wide sideways bias. I have been Selling Iron Condor over the past few weeks. I haven’t been including these in my daily reports, as they are intermediate term in nature, although these are sweet positions in this environment.
SPY-
This rebound seems so bearish to me. The FED comes the rescue and the market still closes on the 200MA. It bounced off of Fibonacci retracements 61.8% on the sell off. And a new downtrend line has been created. I am looking for it to bump down from the backside of the secondary trendline. This may have a few days of consolidation to meet the down trendline. I am looking of a down move around mid-week.
Current positions – Sept 151/152/154 skewed butterfly, O138/Sept140/S156/Oct158 Double Double

IWM – Same, it hit technical levels so perfectly. The Primary trendline was breached, and then a massive rally to the 200 day MA. This could be sideways. I would like to look into selling an Iron Condor for this trade. I was not at my desk during the market poop on Thursday. Unfortunately, I wasn’t able to execute my plan from Tuesday. What a bummer. I did have some orders on for a 74/73/71 skewed butterfly for .31, but no luck on the fill. That would have been huge. I would have rolled it into a Sept 71/73/75 fly on friday when the IWM peaked near 80 (200 day MA). Dang. As it stands now. It is still an a bearish chart with primary trendline support. I will short it hard if it climbs to the 50day MA and it doesn’t base for a little while.
No position

DIA- This one is different. The large DOW Stocks haven’t taken the technical hit the rest of the market has. There was a bounce from the secondary trendline and the 200day MA. There was also 61.8% support from the July 06 lows.
Position – Oct 123/S125/S141/O143 Double Double, Sept 137 call (left over from a Aug/Sept calendar)

Being a volatility seller, and not a directional hero seems like a good place to be right now. Although, I may enter some shorts if I see the right moves. I have spotted 4 issues ripe for calendar flips in the morning.