Tuesday, June 30, 2009

Stopped Out Most of Short Positions, Waiting....; June 19,2009

The market rallied completely unexpectedly as I surely thought it would fall today after Friday's action. July 4th shortened weeks tend to be bullish but I don't usually pay much attention to that type of stuff. The market internals were not impressive at all today but the Dow did confirm the rise from Friday in the S&P and Nasdaq which removed the bearish non-confirmation I discussed the other day. Plus, with the rally today, most of the major indices made new highs to where it creates a clear 3 wave decline from the highs a couple weeks ago. This means it's quite possible the short term correction is over. The market structure in the short term is now unclear, so I stopped out about 60% of my short positions at the highs today (unfortunately). I will wait for clarity on the short term structure before I get aggressively short again. The key element to all this analysis is that the long term picture points strongly toward much lower levels in the stock market.........specifically this means an S&P crash to the 400s with a year or so. So I do not want to lose focus on the bigger picture. So I will continue to look for shorting opportunities only.

I am currently short the S&P with a covered call strategy on the SDS.

2 comments:

Anonymous said...

are you going to update the long term chart? just curious where you pictured the markets at currently, thanks!

Todd said...

okay it's posted. please let me know any comments, questions or critiques you may have.

Todd

StatCounter