My 5 day fiasco.

The past few weeks have been tough, but I learned some things.

It has been a tough couple of days for me. I was teaching Feb 12-13th and wasn’t able to make timely adjustments on the breakdown below the triangle. Then tuesday’s gap down through me off guard and I didn’t trade it properly. Rather than bail my longs, I held tight, and added long on daily weakness (and preset entries). I took lots of heat, and I wasn’t too pleased about my performance. I have faith that if I was in front of my screen on Thursday and Friday, I would have properly added short exposure into the retest of the underside of the major triangle.
SPY 2.24.09.gif
I was fortunate to ski with friends and clients last week in Beaver Creek. But this only allowed me 20 minutes each day last week to make adjustments. And it didn’t work. So I was torn up. And my portfolio was down 8% on the week. I made 4% of that back today, which was nice.
A sustained rally in names like CMCSK, CTXS, ADSK, ASH, AOD, DCA, EDD, GDV, DIS, PFN, RHR, RLF, RWF, KR, NBR, RSH and DD would do me well.
Others names in which I benefit if they stay around these levels:
We bounced off of SPX 741 lows on Monday. This had me in a bad place mentally, but I managed to add longs into the Monday afternoon panic (SPX 750-742). I was at +990 (SPY weighted) deltas @ SPX 745, and a bit nervous. We have bounced (for now) up to SPX 773. And I am slightly optimistic in the short term. We have some overhead supply to make it through @ SPY 78.5. Then more @ 80. If we move above 80.5 , then we will probably rally up to 82-83.
The President and Fed Chairman did a good job today in easing some of the market fears. And he potentially answered some questions. The environment is still very weak, I am looking to buy on weakness with stops below yesterday’s swing lows.
I will dump ALL of my longs into 820-830, and then be getting net short from 830 into the 50 day MA @ 850.
Some possible scenarios:
A) We rally to SPX 800, then fail and retest the lows @ 741. => Fail and go lower, probably 680 range. or => support @ 741 and ramp higher to 820 or greater.
B) Rise to SPX 780 and retest lows @ 741. => Fail and go lower, probably 680 range. or => support @ 741 and ramp higher to 820 or greater.
C) Rise to SPX 820 – 830 and then retest support @ SPX 800, if that fails we test @ SPX 780, if that fails we cascade to 741 and lower. If we hold above 800, then we should see a rise to SPX 850
D) And of course we can simply reverse from these levels back to the SPX 741 lows, and then retest.
This market holds many surprises. If it has shown anything to me, is that when it moves, it moves to extremes.
Fibonacci numbers from the SPY Feb 6th high are:
38% restistance: 79.5
50% resistance: 81.08
62% resistance: 82.65
For Wednesday, I could easily see a retest of the daily pivot on the SPX of 762 or the S1 pivot (749) being tested. And to the upside, I certainly see the R1 pivot (781) being tested.
Here is a movie I just bought. Under the Influence by TGR Very worthwhile!

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