Wednesday Feb 20th – gap down open, finish higher

Those who don’t believe in charts and sentiment are TOO long term for my liking


All week I will be position trading, rather than actively trading. I just have 15-30 minutes to make adjustments in the morning. After that I am skiing with a very fun family. We are going to ski Keystone today. I am interested in finding out what the Fed Minutes have to say, as that may move the market.
With regard to the “Triangles” I talked about on monday’s post. My decision was made when the market had a strong pre-open (up15) and was pinned on the upper line. When the price broke below the 5 minute bar, I bought the SDS ( SP UltraShort) @ 61.80 with a stop above the previous bar. That seemed to work out. The S&P ended down about 2 pts, which is HUGE with respect to where it opened.
When I woke up the S&P futures were down 10, but after the CPI and Housing numbers were released the futures dropped to down 20 (1336). This SP level is significant. Although, there is one more support level @ 1310 before we retest the lows, 1262. The volume on the down move is important.
“‘Sugar, We’re going Down”- Fall Out Boy’s Misheard lyrics

Now that we are broken out of the consolidation, I am looking at the concept of “What will screw the most people?”
My thought is this: Everyone expects a “retest” of the previous lows (I agree). “They” are saying on the way down to the support, “YOU” should be buying those issues that you want to hold longterm. Heck that isn’t what people say at a bear market bottom. What you aren’t hearing is the talking heads mentioning what to do if we break through the next level down. Thereby blowing out the previous support levels.
That said, I don’t see it today. Rather I think we have a gap and fill for the morning. After that, I am not sure. Medium term I think we go down. Very Short term – volatility with prudent stops. Long Term – we seek the 50% retracement.
Here is a thought: If a person miseats for 5 yrs. Eating potato chips and mac and cheese, it can not be fixed in 5 months. We are in a medium term fix. Long term we will be ok if we do the right things now.
At this point I do hold a few longs which are hedged or have limited loss positions:
MSFT – Sold half position last week @ 28.99 and hedged my other 1/2 position with a calendar diagonal. This gives me a little downward protection.
CNET – Small 2 contract (not unit) speculative bullish position.
Everything else is short or sideways.
AIG
AMT
AXP
CAH
CELG
COF
DSX
DTV
PGN
SDS
UA
USB
UST
WB
WEN
Well, I will watch the open soon, and then get ready to ski.
UPDATE – Silly market, eh!
Sold- SDS – Stopped out @ 63.26. A Good trade as that realized a 3:1 reward to risk.
Overall, the accts were off .5% today.
CELG – did great
DSX, COF, AXP, WB – hurt a little
THURS Update:
Pop and Flop. SP opened up 6. I sold it via the SDS, as it broke below it’s 5 minute low. @61.67. And then I went skiing. I set a .80 trailing stop, which never was violated. Overall the portfolio was up .8%.
Friday update:
The premarket is up 3 on the SP. I have a number of sideways trades on right now, but I am not placing directional bets. This market is chopping up directional players. But sideways plays have been terrific. My guess is down, but that is just an educated guess.

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