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I posted about being in the inverse etfs FXP and SDS, but I didn’t post that I took medium sized short trade at the Rydex 10:45 window in the inverse spx, inverse ndx, and inverse rut funds. It was an ultra risky play considering the NDX was already down 6% at that time. I was using my market intuition to make the trade and personal expectations based on technical analysis of where the market should be at the EOD. Its just something you pick up overtime. That trade ended up being a great call, because I made an average of 3.5% from that point as the market sold off hard all day breaking new lows into the close.

I also took gains of 3% in both the SDS and FXP which I sold out of early on the day.

So where are we now? Well I’m expecting an intraday volatile move tomorrow that ends up creating a hammer on the day (that is my hope). If that happens I’m buying the market heavily. If not, I’m probably laddering in slowly.

I’ve posted the popular volatility charts that everyone is looking at. Well the market is making people forget about them because normally we’ve seen a spike and then a reversal. However, this time the market has continued to selloff and volatility has just rode the upper bollinger band higher which has made many a trader (not me) get crushed in this market over the last month and a half.

Now I don’t always explain what I’m looking for and post charts that explain them. Instead I tend to talk and assume you would know what the F I’m saying or predicting will come to pass. On September 8th I said, “Now for a technical bottom, I want to see positive divergences forming while the general markets close lower.” Then on September 18th I blabbed, “However, my personal feelings and belief based on what I’m seeing in indicators (aside from VIX/VXN that did qualify a bottom) is that this is not over. We didn’t even get oversold on many indicators and some are just rolling over now. Several people have pointed this out already and I don’t even use the same secret sauce they are using to smell this. No divergences, nothing. If you scrape out the 1billion shares traded in AIG today, you have a 2billion day big deal. Not enough. We need panic + time for a bottom – not bailouts.”

These current charts show what I was waiting, looking, and expecting to occur in the charts several weeks ago.

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