Current Long Positions (stop-losses in parentheses):
TICC (8.51), QQQQ (Hedge)
Current Short Positions (stop-losses in parentheses): SPY (113.30), DGX (50.09), FCN (36.75), URBN (34.91), OMI (29.31), HSY (49.93)
BIAS: 0% Neutral (52% Short w/o QQQQ)
Economic Reports Due Out (Times are EST): No reports due out.
My Observations and What to Expect:
- Futures currently trading down about 0.6%.
- Yesterday’s sell-off was a good start for the bears to begin the next leg down in this market.
- Expect the bulls to strongly defend the Monday lows. If the price level breaks, look for a run to 1056 on the S&P.
- Early morning futures action indicates the bears are looking to add to yesterday’s losses and push this market even lower. Fridays have been great days recently for panic sells.
Actions I Will Be Taking:
- To get out of my QQQQ position as quickly as possible, should the negative sentiment continue into the open.
- It is unlikely I will be adding any additional short positions to the portfolio this morning.
- The gap down that we are seeing so far this morning looks to be very fade-able at the open. No news, low volume, reasonable gap.
- Continue to scalp using SDS/SSO, TNA/TZA, QID/QLD where the setups exist.