Sunday Position Update and Thoughts
Current positions are:
100% short via the inverse RUT and NDX funds
SQQQ, DRV, and some puts in GMCR (untweeted)
Everything is not perfect for a down move here. However, I think its going to move that way. I know looking at the charts I would take this trade all day, but of course it can go wrong just the same. If one continues to act according to their plan – and their plan is tested as being successful forward and backward – then taking losses correctly are a major key to success.
We’ll see if this is the right trade or not in the coming week. I am still anticipating a bottom sometime this month. The big thing I’m looking for is another pullback, but this will be the one to buy for a larger move higher.
If we go higher from here, I think the market will selloff in one day that recaptures about 2 days worth of trading action in dramatic fashion. This scenario would probably kick me out of positions setting up for a potential miss on the downside.
The other big scenario is a 2-3 day retest lower starting Monday. Imo this would be the low to buy and the scenario I’m playing for. If we get the selloff move, this will most likely set up a rally that at some point meets or gets close to the 200SMA.
Anything I said above is a guess. If the charts say differently at the time I will act according to them and not hang on the guess/bias I’ve posted above.