Current Long Positions (stop-losses in parentheses): QQQQ (Hedge)
Current Short Positions (stop-losses in parentheses): ESV (42.84), MR (33.39), SPY (109.07), NUS (27.59)
Economic Reports Due Out (Times are EST): None
My Observations and What to Expect:
- Earnings for Alcoa is released today. Alcoa sets the stage for the earnings season.
- The rally seen last week makes me think that we will see the market sell the earnings.
- Market is neither overbought nor oversold on any significant indicator at this point.
- Volume continues to drop off in a major way – further evidence of a dead-cat bounce.
- No major news scheduled, could make for a quiet open.
- Continue to watch BP efforts to plug the hole in the Gulf, and the affects it has on the markets, and energy in particular as a result.
- S&P rally beyond 1090ish seems unlikely. Rally is probably coming to an end here, real soon, if this is indeed a bull-trap. All indications says it is.
Actions I Will Be Taking:
- WIll look to commit an additional 20% of my capital to the short side on any market weakness.
- WIll stay in QQQQ until the market makes it apparent it is looking to reverse course.
- WIll not hesitate to get back in/stay in QQQQ if the market continues to stay strong today.
- Won’t play any earnings announcements this season. I will instead close any position I might have, at least the day before.
- Should the market sell-off from the get go, I will sell my QQQQ position at the first intraday-bounce
- When Market Opens up I will wait for a technical break before selling QQQQ.
- All other short positions I plan on leaving alone, and letting my stops pay out.