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Looking at my weekly charts I see a weekly RSI divergence which is fairly decent at forecasting a one week down move. Usually the pullback takes back the previous week’s range. After that the market usually runs back to new highs.

Despite this, I stayed in cash with my index funds as I’m a little too frazzled to attempt a short into a Monday as my shorts haven’t exactly been stellar – watch this one work now that I’m not in it. This one is the best reason I’ve had so far though to be short. I will look to pounce on the short side early on if the market hints that way Monday.

I however, bought the things that are turning UP on my charts today.

UCO (Based on USO and crude movement), DBE, DGP (Double Gold), REA (Rydex 2x Select Energy Index – which is basically heavy long XOM), GEX (for alternative energy exposure), and BRF (Brazil Smallcaps).

If we back out a couple of weeks I bought USO calls only to sell them without my signals giving me a reason to sell them. I sold based on fear. Today it broke out and those calls are up significantly. I sold them for a loss. This happens often to me and its something I have to work on. As my systems put me in the right trade early ahead of the move. I am reading a book called, Super Trader, which basically covers what I know already, but reinforces the hard fact. Have a good system, follow it.

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