Major Crack in the trend


The market tipped it’s hand yesterday and today. Now to gameplan the selldown.

The market going to get UGLY. Albeit, I expect a brief thursday rally. I have been disgusted by some of the bull clowns on CNBC. The government intervention is a joke, in some cases necessary, but still a JOKE. This market is WAY overbought. And the buyers are ridiculous at these levels. The government and CNBC have talked up the market in time to let the Companies (smartly) issue equity to pay down debt. And the market is buying “corporate insider” shares. That had to end. More supply yet higher prices… SUCKERS! I hear people talking about support on the S&P 500 @ 875, and 850. My question is this, when this market moves, when does it make that small of a move? It hasn’t in 2 years. I could see a stair stepping move down to a 50%-62% retracement.
I expect the bulls know they have been living on borrowed time, and I know that the bears are ready to strike. THUNDERSTRUCK!

Finally, today we have major breaks in the trend. I see a method of operation to navigate the next few days. Last Thursday I dumped more of my mutuals, and I plan on doing the same thing tomorrow. IF we have another rally into ES 900 and a drop in Volatility. I will have a number of ideas for put ratio backspreads, selling of retail and financial call spreads, bearish calendar spreads,straddles, and buying put options. I have a number of ideas here, many of which are Vega positive, some of which are positive theta, and a number of gamma increasing trades to the downside.
Look at these charts. I imagine we will have support on the uptrending 50 day MA and lower ranges of the bollinger bands.
I expect the Nasdaq (NQ), Russell 2000(TF), and MidCap 400 (EMD) to be relatively strong into friday vs. Dow (YM) and S&P (ES).
I also have plans for the XLB, FCX, TCK to the long side at some point. However I want to remain short the general market in my directional accts. I think we may get a few pushes up at various support levels. But “Sell in May and go away” may be money.
SPX – MAJOR break today. I would love another opportunity to short as it approaches 900. My first downleg target is 830.
SPX 5.13.gif
INDU – Just broke today. First leg down to 8050-8100.
INDU 5.13.gif
NDX – Support at 1342 relative to ES and YM
NDX 5.13.gif
Russell 2000 – Support 472 relative to ES and YM
RUT 5.13.gif
S&P MIdCap 400 – support 545 relative to the ES and YM
EMD 5.13.gif
10yr – My target has been 122 1/2
ZN 5.13.gif
Canadian $ – I remain a fan of this, as with a number of commodities. But I would like to pick it up on a pullback. I will get interested in the .84 level
6C 5.13.gif
When I become a buyer again, I would like to build up my commodity and Canadian dollar allocations.

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