Friday, March 11, 2016

Mar 11 - Another squeeze but getting closer to good short set up

Yesterday was an epic stop run on both sides long and short.  Now we are getting the move I was expecting albeit a day late.  I had gone short late morning yesterday thinking that it was a failed consolidation period and then realized it was a trap and I quickly covered before the ramp fully materialized.

I am flat and hoping for some more upside prior to FOMC.  If SPY can get to its upper BB on the daily around 203-204 and VIX taps its lower band that would make a great short entry.

You can see how shorts were trapped this morning.

North of the upper BB but still not a good idea to short with the gap up
 The gap fill at 204 coincides with the upper BB which is the short entry I am looking for.
 VIX when it hits the orange bar, I will probably initiate shorts but not yet as it appears we are in another upleg.


Doug said...

Good call. Yeah, I still have a 6% short in SSO which offsets most of my longs. I'm not going to cover. And TLT is trending down slightly..not as much as you'd expect if this rally was driven by better economic news.

I think you're plan going forward makes a lot of sense.

One thing that you might not be aware of is that China once again satisfied a dollar shortage in January with Repos and Swap arrangements. They've done this before after the Aug '15 meltdown. Because these "hedges" expire, the dollar turmoil (and CNY devaluations) re-start about three months later. In sum, expect devaluation pressure and "turmoil" to re-appear at the end of March and early April.

Greenlander said...

Thanks Doug, I will keep China in mind

May 15 - Closed out IWM puts for +120% and picked up DAL and HD Jun calls

I'm going to let the market do its thing this week and probably stay away from new positions until Friday unless something very good pop...