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The NDX charts demonstrates how I saved myself from eating a big loss. I got out on the gap up. The reason was the little gap up was showing me enough information for a weekly signal. I knew it had to selloff and that would give me the information I needed to make a decision at the close. This is where I went to cash with my index longs. Taking a gain in the NDX and RUT instead of the large negative swing on the day in both.

I talked about selling the EWZ I bought on Thursday at the close on a gap up. I did that and a couple hundo on the calls. Coincidentally EWZ and the NDX moved to sell signals perfectly.

I also played AAPL on the short side, but saw it late. Even though I saw the chart late after the sell signal, I saw the bear flag setting up and knew I could still play it on the short side. I waited for price to catch up to the band and bought puts.

What I think is coming next week is two scenarios, both are bullish. I think the market is going higher from here.

1: Gap down, flush the last of late comers.
2: Gap up, won’t let people on board for a 1 week pop.

I’m in favor of #2, but either way expecting a decent move into Friday.

I bought calls in EWZ March 66 calls, CSCO March 22 calls, IYZ March 19 calls, TYH, and VALE March 28 calls.

Brazil related stocks are extremely oversold. The US markets are relatively oversold, but the trend of the market has changed. I am playing a bounce. Often at a trend change there is a counter-bounce for a 1-3 week period. In this case I don’t know how long its going to bounce for, but the trade setup is for 1 week.

I am in cash with the indexes and hold probably 88% cash in trading accounts. The positions above are on the small side and I did this in case we gap down. If we gap down I want to buy aggressively. If we gap up I will buy less aggressively, but I still think the market will trade in the direction of the gap up.

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