Current Long Positions (stop-losses in parentheses): TICC (8.42)

Current Short Positions (stop-losses in parentheses): SPY (113.30), DGX (50.09), FCN (36.75)

BIAS: 45% Short

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

  • Futures flat.
  • Despite yesterday’s rally, volume wasn’t overly impressive (constant theme these days).
  • Yesterday’s end of day sell-off leaves me wondering if the bulls have no faith in the rally and decided to take profits, or if the bears were using the rally to reload their positions, or a combination of both.
  • Wouldn’t put much thought into the Hindenburg Omen as a basis to buy or sell.
  • No major new reports today. If there is a gap this morning it would make for a good fade setup.
  • Bulls will look to maintain yesterday’s gains and show some follow-through.
  • Bears will use rally as opportunity to reload their short positions.
  • Bears will target 1069 (Monday’s lows) and the 50 day moving average to push the market below. 
  • Bulls will want to establish Monday as the new lows to trade off of and the re-drawing of the upward trendline – just not as steep as before, but a continuation off of the July lows.

Actions I Will Be Taking:

  • Chose not to add any new positions to the portfolio yesterday.
  • Will look to  possibly adding another 1-2 new short positions to the portfolio today.
  • If morning gap widens, I’ll play the fade.
  • Scalp where I can.
  • Hedge my portfolio with a long position in QQQQ if the market tries to run. Didn’t do a good job yesterday of that when I could have.

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