Good Risk / Reward Enter Short

Either we break or hold but it certainly is at resistance in a nice down channel.

Look what last night created (Updated 04/09/09)

04/09/09 - One of the hardest things to do as a trader is close out positions that you believe are winners when the are going against you. Yesterday when the pattern was broken up and going into a holiday trading day, which for th0se that have been trading a while know are usually bullish in action, I closed out many positi0ns in the last 30 min of trading yesterday. A hard thing to do but today discipline more times than not keep you from getting killed. I feel very good about my decision yesterday and am looking to reposition my trades.

4/8/09 - And this morning. It was suggested this pattern lacked a true H&S pattern from someone I have a tremendous amount of respect. It does though seem to be unfolding . Put your stops in and ride your profits.

04/07/09 - What a beautiful thing to see on the charts this morning....beautiful if you are short. Looks like we have a very nice H&S on the ES chart. Let's see if we can break the neck line today and push down into the target zone of the low 800's

Thanks

4/5/09 - Wow! I've only had my blog up for a few weeks now. Last Sunday I decided to put a sitemeter on so I could see what kind of response I was getting. Last 7 day total hits 1,146.

GE Leaves Some Nice Gaps (updated 04/04/09)

04/08/09 - Well our little break out yesterday on the close did exactly as I expected. We need to do some back filling which is exactly what I am positioned for. It does look like this stock though wants to push a few bucks higher so I will be quick to take my profits / lock in with stops.

04/07 - Watch this break out if you are short. Yes it could be a bull trap but it also could warrant a move up another 10%

But Maybe One More Push Up?

04/03/09 Back in with Puts

GE Trade Closed 3/30/09

Chart 1

Chart 2

Chart 3

04/03/09 - I started buying puts on Thursday with the gap up and added when I saw the volume on Friday plus the fact that we closed with an inside day.

3/17/09 (Update) GE closed today at $10..I added to my short position at this level. There is a huge gap that will be filled...20% below today's closing price.

3/18/09 GE enjoyed a nice 3.% pop this afternoon closing $10.32 following the FOMC announcement. Thursday, March 19th, GE host an investor meeting in NY. Their goal is to "calm" investors nerves about their exposure. Expect a lot of volatility in the next two day! I am still short via options on GE. For those that are not astute in charting, gaps are usually filled.

3/20/09 - Closed March 10 puts. Rolling into April Vertical Call Spread next week to target zone.

03/29/09 - Interesting action on GE in March. I have not covered my short positions. Chart #2 is a volume by price available at http://bigcharts.marketwatch.com/. Let's see if this plays out as I have projected. Notice the significant amount of accumulation in the $6.75 - $7.25 area, lack of volume highlighted in yellow, and significant volume that appears in the $9.75 - $10.25 area. Following a +40% gain in just a few weeks, my assumption is distribution occurred in this area. GE's earnings are scheduled to be released April 17th at 8:30 a.m.....options expiration day! I have establishes a fairly larger position of April 10,11,12 puts and sold vertical call spreads. A break of $12.53 invalidates strategy. Gaps remain open at $13 and $14.28. I believe it would take a significant push to fill these near term.

Another View

04/03/09 - Sometimes you discover a different view of the market when you switch between candlesticks, bars, and line style. Looks very much like we are at an inflection point for the market. See you in 12 hrs...should be interesting where the line will be then.

Up (or) Down From Here Updated 04/02/09

Chart 2

04/01/09 - Bulls took hold of the market today in front of the M2M decision tomorrow, uptick rule, this that and the other. The Challenger Report show the jobs market is in the tank. I was surprised to see such a strong rally following this report. I noticed three things reviewing today's closing charts.

1. Our move down from the the 666 low stopped between two fib levels...never making it to the .38 level. You would expect this at least from such a strong move off the bottom.

2. We filled the gap today, or came within a fraction of doing so on the SPX

3. Today we completed an A-B-C pattern where A=C

So where am I going with this. I believe we at the least get a move back down to the 770 level before resuming any uptrend

There is no doubt tomorrow will be very volatile

04-02-09 - Not always are we on the right side of the trade. (AZO) saved my ass today (see below) as it took a deep dive. I used my profits from AZO to shore up my losses in SPY. I as some were looking for a "sell the news" scenario but it just didn't happen. After spending several hours reviewing the charts I see that we are no higher or lower than we were one week ago. We have a nice gap left from today's move that would make my trade whole should we fill it Friday / Monday. The market has totally ignored two horrible employment reports this week and we have one more tomorrow. I am currently long FAZ and short SPY so any dip in the market tomorrow will produce good gains as I added to my position today. I saw on the news tonight the market is set to post its best gain since 1930 something. The fundamentals in our economy still suck and I don't think you will find to many people out there that will disagree with the fact that we will test our recent lows. The trading environment today though is day by day so that is as far as I am going to try and trade the market. We continue to see gap after gap up and down...trapping buyers and sellers alike...mostly sellers. Chart 2 speaks volumes and if you have tried to fight it ...well you know. Until the trend is broken...remember this "the trend is your friend".

Caveat Emptor - Market Down 250 pts. (Updated 03/31/09)

03-30-03 - This is a low volume sell off. It might pick up steam but this market has been so volatile and my profits were so good this morning I gave covered most of my short positions. The ES is trying to make new lows for the day as of this writing. I am sure there were a ton of stops just below 778.50. We could see a quick snap back rally after hitting these stops. Quarter end is tomorrow and I expect the market to make every effort to make it up as high as possible before resuming the downtrend in April.

03-31-09 - Yep....unwound the calls on my straddle today. Man it's great when you can leg out of positions and make money on both sides