Essentially I made one terrible trade which got me caught on the Thursday downdraft. Now I’m looking to get short and in fact did today in the indexes. However, it looks like there might even be the beginning of that bounce I was talking about happening yesterday. That is ok, because I will ladder into an upmove and I might even hedge by going long for a day or two. We’ll see.

I sold out of FRPT taking the final gain of 4%+ and selling RT at breakeven and VLO for a loss of a few %. I jumped on SKF for a daytrade, but quickly sold it for a .30 cent loss. I saw that it was NOT moving higher when the indexes were dropping. Then when paintbars started showing divergences and red lights, I knew the bounce was going to materialize.

Then I just took a break in the afternoon like I usually do, and later on I got long some FNM (Fannie Mae). I knew if a bounce was going to happen this high beta mover was going to be at the top. In fact, it was the stock that was the most up on my watchlists at the time. I bought in @ 6.82 and out at 7 for a small gain of 2.6%. I was starting watch it explode after hours to the upside and was really starting to question why I sold. It was up around 15% just in the AH. Then the news broke and the stock sold OFF -25%. This thing is a hand grenade and my plan was never to hold this stock overnight and I’m glad I stuck to my plan.

My stuff shows that the US dollar (really I only track the UUP 2x dollar fund as my barometer) is ready for a pullback. So I think thats why commodity related stocks caught a bid today and will probably continue sometime into midweek.

If the dollar pulls back and restaurants stay strong, it will be telling that they have the potential for more upside.

So if the dollar pulls back, look for a pop in gold. That pop might be big considering how bad its been beaten down.

Nice hammers formed on the indexes today, but will they act accordingly?

Thanks for reading

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