Today Made Up For It

July 1st, 2011 | by Hugo Gullett |

I’m still short. I didn’t get wrapped up in feeling bullish after the Thursday, Friday, Tuesday thrust. It did kick me out of my trading account positions though and it did get me questioning myself. However, I stuck with the 2x inverse funds after going over the weekly indicators and seeing that there was still definite danger in the charts and in my indicators. It was not a good long setup. Today made up for it. Tuesday’s move is what really threw me.

Basically the indexes are showing the same exact setup as last week. However, what happened this time around is that we are getting oversold in the back half of the week and not the Monday/Tuesday like we did last week.

Last week I was playing for a total selloff into last Friday that would setup a buy going into this week. We had a very nice reactionary short squeeze that was sort of a blowoff. We should see new closing lows now. I’ve been in the 2x inverse funds after adding back to 100% on Thursday (I think). However, Thurs and Friday were bad for my option positions which took losses and scared me/stopped me out of my positions which would have killed today and more than made up for any drawdown. Same ole same ole.

Its no surprise where we closed today at least on the SPY, its the around the close of 5-24-11, 3-29-11 and close to others on this critical support area. If we gap below that tomorrow look for panic and then maybe a bounce to test. Followed by another down day Friday to secure oversold readings. If we do selloff and bounce only mildly and Friday is a nothing day. I would think the selloff continues to next week as well.

Very happy I stuck with the 2x inverse funds. Played a few shorts today, FAZ and IWM puts. I’m out of the IWM puts, but kept FAZ and bought EDZ heavy. EDZ I think is a bargain here technically. I will get heavier short the Emerging complex tomorrow as well. RSX, EEM puts, the whole nine.

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