80% Chance Of Showers and Down Move

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January 12, 2012

Without posting proof of such a claim, I don’t feel like posting a screenshot, but the COMPX is overbought here. More than not, alot more, we will see a pullback in the market over the next 5 days. It tends to come quickly when it does. I’m short via 2x NDX and RUT funds, bought QQQ puts at close. Sold all open positions mentioned yesterday – today. I rebought the short trade > QQQ puts because of the signals I’m seeing on the COMPX. It is a systematic trade and I need to hold out for 5 days or less. If the pullback is mild we should explode to the upside when its over. If the pullback is significant, there is a solid chance this early January movement is nothing but a bear rally.

Again, without posting a chart here to show my thesis, I’m sure it seems hogwashy. Maybe I’ll post it tomorrow.

  • http://optionalpha.com/blog Kirk Nathaniel – Option Alpha

    I know that it can be hard to post the charts all the time – but it would be cool to see the chart and how you are setting it up. Seems the breakout higher is in full motion today with the China news – does that change your COMPX outlook?