Tuesday, October 26, 2010

Position Update

Update: not waiting for stop, closed the shorts.  Why?  USD significant move up, X bad news, and market holding flat while momentum flying.  Why? The increasing possibility of a sideways basing under the weekly 200SMA and break through instead of a pullback.   All flat in all accounts.

As we wrote in our blog last night we came into today short TNA SSO SPY.   Usually we would have covered the shorts into today's gap  down but since we wanted to go long near the open (newsletter long alerts MOS NFLX) we decided to keep them on as hedge, especially since it is only a 1/4 position left and we have cushion in all three.  We are now out of our day-trade longs MOS NFLX and have placed stops on all of the shorts on a move through SPY 119.1

Monday, October 25, 2010

Market Talk

Active traders like ourselves can't really be bears or bulls.  Traders like us just trade whatever sets.  However, we can have a bias, and that bias simply makes us look for more opportunities in a certain direction.   Our bias is now short due to the market going against major resistance on multiple sectors.

However, with the QE2/POMO anomalies we're also very aware we can overshoot resistance.  However any move above the 200SMA weekly on the SPX for the next little while will be treated as overshoot short for us meaning that we would short any intraday extended move with target a move back to the 200SMA.  

Our best days in trading almost always come when we're against a major level of support or resistance.   This is a time when we are aggressive as we have conviction.

We covered a large part of the daytrade but are short swing TNA SSO SPY and will trade around the position accordingly.

Sunday, October 24, 2010

Market Talk

We've posted this chart a number of  times over the  last little while at StockTwits-- it shows the importance of the 200SMA weekly on the SPY.    Expect at least a pull-back after the first time we kiss the MA (currently just under 120).  A pull-back and consolidation under the weekly 200SMA should be considered healthy as we consolidate in time and price under this very important zone.    If we do go through without pause then we believe the chance of a breakout failure would increase exponentially and we would adjust our positions accordingly.

What would be an ideal pull-back scenario?  A 50% pullback from the MA and the trend-line which would approximately be 5 points, which would land the SPY at 115, which of course in itself is major support.