I was in sync on Monday and Tuesday, then got a bit out of sync on Wednesday as the ES and Dow remained strong, and the Russell, Nas, and Midcaps fell out of bed. That disconnect drove me to research. Wednesday night was a long night of coming up with a gameplan for the rest of the week. It was a very profitable bit of time spent.
This is what I love about Sundays
The NQ, TF, and EMD rallied hard off of their 23.6% retracement level. On Thursday, I became short of the S&P into the top of it’s newly formed downchannel (895). I called up my life Insurance company, 401K company, and sold ALL of my long mutual funds.
This seems to be a very relevant channel being created. It has already been very profitable, and led to some very nice entries and exits.
A few things to remember about this rally. It was ignited due to anticipation of suspension of mark to market accounting (Mark to Fantasy), companies such as Citibank announcing a profits IF you didn’t count any of their losses… WTF?!? Some earnings better than “expected”. This is funny if one realizes that many companies were NOT giving guidance, or lowered it to hideously low levels. And the anticipation of “Stress Tests”. The TV and other media have done a very good job of convincing the general public that it is time to buy, and not miss this “New Bull Market”.
SPX – I like what this chart shows me. I will probably be getting long a few Commodity related stocks into the 830-840 level. I am playing for an orderly pullback in the ES and YM. I have a number of shorts via puts, short call spreads, and 85p calendars. The thesis being, investors don’t want to be out of the market, because they think this is the new bull. So they will be in the Consumer Staples and Commodity related equity sectors.
Selling ES vs NQ and MC.
Looking for first bounce @ 868, then 840.
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