Sunday, June 26, 2016

Jun 26 - Uncertain near future

I closed out my puts for a solid gain as I bought them at the peak of the day Friday.  I came extremely close to holding 1/2 but decided against it as I felt very uncomfortable shorting into the first big move down.  Friday was the strangest move I have ever seen, Flash Crash and GFC included.  It is obvious that too many were positioned on the long side but the timing and magnitude were surprising.

Question is whether
1.  waterfall event and we go straight down
2.  dead cat bounce Mon/ Tues then back down
3.  a few bounces on this current level and then to retest lows
4.  this friday crash was a one off event and we retest ATH

Lots of possibilities but lots of technical damage done.

I am leaning towards a bounce of some kind, for how long I don't know, and eventually another move down.

Right now there are the opposing forces of potential central bank activity to trigger a bounce but if we get more selling, more forced liquidation which could result in waterfall event.  So there are conflicting forces here and for that reason I reluctantly closed shorts at close Friday.  I would like to see some kind of bounce to go short again and if we gap down and go, I won't be able to chase it.

Hourly showing strong divergence and a possible bounce.

The daily near support but volume was monstrous so this is probably not a one and done deal.

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