Monday, August 17, 2009

Could it be true?

This was posted Monday last week.

Move 1 = this move would be corrective of nature and bring us back to the 965-980 levels on SPX. This should resolve itself by the end of this week and possibly range into early next week.

Move 2 (OPEX week) = this move here should reattempt the upper ranges we have printed on the market. Due to open interest it is my feel that we may see the 4 digits again.

Well the time has come and we hit my target and I am VERY afraid to hedge myself here now with a long position. I have just taken a hedge via NQ @ 1573 to protect my open profits.


  1. as you can imagine I am quite afraid to hold a long position on such a strong down day but I have to respect the market.

    The probabilities of making a new low for the day are quite high so I have to be quite careful on how I want to play the long side here.

  2. stopped out of NQ hedge here. Not willing to risk it =)

  3. good move. Potential could be 956 or 935 in this down leg.

  4. I have to admit though I do expect a bit more upside from here. At least a retest of the HOD/open price.

    Stepping days have been working amazingly on up days, however have not come through as strong trend days on the downside. Its the same old story and volume yet again has disappeared.

    This really goes to show what many others have been saying - VERY high drop in short interest across the board and no desire to enter new shorts here after they were just covered recently.

    On the other hand - I talked to a hedge fund buddy last week and they are still fully short this market (and have been during this entire rally). Of course they play on a very different scale and are properly hedged but expectations to the downside are quite large.

  5. technically close at the lows ... but we have all been there. My targets above are still valid so we still have a bit more room on the downside possibly into tuesday/wednesday.

    By Friday this week I expect us to trade higher then we are currently. Depending on the strength of the sell off and how we continue tomorrow will decide how much higher but I do expect 998 again.