The bears were holding it together early on, and once we made new lows on the day, I’ll admit, it sucked me in. I have three long positions, and I went ahead and started to curb my long exposure by adding SDS (a 2:1 inverse of the returns on SPX).
That trade didn’t last much more than 49 minutes before I realized it was a bit premature.
Did I trade prematurely? No. The market was starting to breakdown and establishing new lows after coiling sideways all morning long. It made sense, based on what I knew at the time.
But the market decided that anything short at this juncture would be premature, and it displayed that by ripping off 16 points higher to the upside. It was awkward and it was weird, and certainly not something I’ve seen much of over the last six months.
So I’m out of that short-lived (no pun intended) trade.
However, should the market take a gander and decide to revisit that 200-day moving average and then break it, then here are the short setups you will want to be following:
