Current Long Positions (stop-losses in parentheses): TICC (8.51)

Current Short Positions (stop-losses in parentheses): SPY (108.68), DGX (45.95), FCN (35.01), OMI (27.76), ADBE (29.78), DDS (22.16), BIDU (83.39), HK (16.56), CERN (79.28)

BIAS: 61% Short

Economic Reports Due Out (Times are EST): Monster Employment Index (6am), Jobless Claims (8:30am), Productivity and Costs (8:30am), Bernanke Speaks (9am), Factory Order (10am), Pending Home Sales (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

  • Futures are break-even.
  • Unbelievable how bullish everyone has become in 1 day. CNBC, Bloomberg, blogs and talking heads are all believers in the market suddenly.
  • One day doesn’t change anything. Wait for the charts to confirm new behaviors in the market.
  • Any move up today, will result in a break of the 20 and 50 day moving averages.
  • Jobless claims is all the rage today.
  • Volume wasn’t overwhelmingly strong yesterday, and don’t expect it to be for the rest of this week with Labor Day Weekend on the horizon.
  • 1100 is key level for bulls to break and bears to hold.
  • 1040 is still the only level to the downside that the bulls and bears care about.

Actions I Will Be Taking:

  • Yesterday’s rally was so hard and fast, it didn’t make much sense to hedge the portfolio when the S&P was already up 30 points.
  • If the jobs number is strong, then I will hedge the portfolio.
  • Could add another 1 to 2 short positions to the portfolio today.
  • Scalp the market extremes will be my main focus if we are range-bound today.