Waiting on one more day for the indexes to bleed a little red, rest a little bit.

Remain short with the 2x index funds, but long in small size the stocks mentioned yesterday and will look to get more long on el dippos.

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First, I got out of the last of my index shorts this morning, and then put them back on at the close. Reason:
Gapped up doji on NDX with an overbought condition. C’mon now. Under any other circumstance, this would be a huge shorting opportunity for 1-2 day trade.

Despite me trying to catch a very short term down draft, I want to get VERY VERY LONG. Especially things that haven’t moved large yet. There are plenty of these opportunities.

One example:

I like the setups in HAL, POT, BP, SBS, TNE, USO, and a slew of other Gold and Oil plays.

I bought today:
HAL, BP (added), SBS, TNE, USO (July 42 calls). However, I also bought these small/micro cap stocks:
NENG, FSII, ASTC, INSM, PXLW, SCLN, TSEM

Reason: This portfolio of stocks I should have bought a few weeks ago per one of my many “systems”, but for whatever reason, I didn’t. I’m playing catchup and the portfolio was only up about 12% in the past 3-4 weeks. I say only, because for this particular system that is really on the low side of what these mini-portfolio’s usually return in a good trend.

I sold my ERX today taking profits, but will getting right back into it.

Despite these buys, I want to buy more stocks, however, I hedged significantly before the close with SQQQ (Triple short QQQQ), and 2x inverse funds, primarily NDX, but also SPX, RUT.

Why its worth a shot for a short for one day?
The gapped up doji on the NDX.
The RSI divergence on the daily chart.
Extreme RSI readings as well as stochastics.

These items have been reason enough in the past. The ingredients are there for a down day. Again, I’m not a permabear by trying to catch a down day. I have no delusions of grandeur thinking the Dow is going to 900.
I want to be more long, just don’t want to buy it all up here.

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For the past 3 days now I’ve been playing the overbought condition of the market. Yesterday was my chance to get out, but I pressed it.

I got into SPY and IWM puts as well as TZA. I wish I didn’t. Losses in all of that. Never had a signal to do it on an intraday basis, but the daily is setup for a move, I don’t know the size of the move, but 1 day should give a red candle. Once this is overwith, I am ready to get back long. In fact, I want to buy certain stocks now even with the overbought condition. Particularly the quality laggers. I did buy 2 today plus one energy etf.

BP, PFE, ERX

Oil and gold are the plays everyone is talking about now. I was in them 2 weeks ago, took last week off, and now this is the week where they are acting well again. This is a train I want to get back on.

People are talking about the inflation trade based on FED speak, so we will see gold, oil, and maybe the soft ags do well. Coincidentally the TIP (TIPS) etf is turning UP on my screen this week. Interesting coincidence you think?

I also want to buy a combination of mostly quality dividend payers and some microcaps that are setup right.

Hence, the BP trade. Some others I’m on board with are:
JEF
HAL
GOLD
CPBY
CCME
GNA
MUR
PM
MRK
LLY
ETP
DNR
ACI
POT

Too many to name. I’m entering swing mode and will ride trends. Hopefully, though I get a down day tomorrow for my 2x inverse position.

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I sold my IWM and SPY puts for gains near the day’s lows, and trimmed some TZA and all of FAZ when the market was rallying back to even. I kept my 2x inverse index funds where they were 75% rut short 25% ndx short. Still holding TZA, SRS.

There is a good chance with today’s rally to even, that I will get that SPX close below 1145.61. It is what I’m playing for. On a drop to those levels or lower, I want to be a buyer.

What I’m buying is going to be of the conservative boring Dow stock variety. I’ll post it when we get there.

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I was short heading into today and took half of my index shorts off at the morning window when the market was down. The market started rallying right off the lows. That was a decent gain, however, the late day rally on the half I left on, washed that out.

I put that cash to work at the close and went back in heavy short in the NDX/RUT 2x inverse funds with more of a RUT tilt. This time I also added IWM puts, TZA, SRS, and SPY puts to the mix.

The trend is still ok. There is nothing saying that is changing. This is a “finesse” trade inside the up move. Sometimes these trades are stupid. We’ll see. Of course, trends change after a new high is made, so its possible here that “could” happen. However, as of this moment, that is not the case.

On a weekly basis the market is not that overbought. It could go much higher. On a daily basis, we are seriously overbought. Check how very high RSI levels resolve. Its done quickly. There will be a smack down day very soon. I’m betting its tomorrow or starts tomorrow.

I also experimented with more of my 1 minute chart trading. That was waste of time today. Lost money doing that.

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Took a short at the close in the 2x index funds. 50% NDX, 50% RUT.

Traded IWM puts most of the day, was up quite nicely on the break lower in the morning, then chopped around all day and gave back that gain and then went into the red. However, at the end of the day I caught the last trend down with IWM and SPY puts (did not tweet, but tweeted everything else). Ended the day as a slight loss. Alot of work for that.

I tested out today trading with 1 minute charts and utilizing something new, and I think on a better trending day it will work out. I also may have overtraded. Well I definitely did. I could have walked with the gain this morning.

What I wanted to do was be more short than just the index funds. Owning puts in the SPY or IWM, plus buying some of the 3x inverse etfs. This would be based on the daily overbought condition. In the past I might have done this, but now I’m going to see if we possibly gap up to 1150 SPX and fall. The SPX carved out some top resistance today “coincidentally” in an overbought condition.

1 day drop potential:
LVS, AAPL, XLF, and 390 more.

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*this is a scheduled post made last night. As of this posting the futures were: /YM -2, /NQ +1.25, /ES -.50

All of this could change on the open, but often the move will carry over. Especially when some of the overbought conditions are in play. We’ll see if this works in a few hours.

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