I’ve been out of town since Friday and did not have a chance to update the blog. Here is an excerpt about my trades and plan from Friday’s Trade Report:
It’s obvious today was a short covering rally. Large price moves like we saw today that aren’t confirmed by volume are almost always short covering rallies. I mentioned last night that the 50 day MA would provide resistance for SPY. It’s amazing how strong that resistance was today. Under normal market conditions, I would initiate a short position after the failure, but I decided against it. For one, there is the fear of a ban on shorting. Second, we have no idea what type of news will come out over the weekend. I don’t want to hold any positions and risk a gap open that goes against my trade on Monday.
For that reason, I exited all my positions today. As noted in the blog, I exited everything this morning for big gains during the first hour of trading. I then re-bought SSO on the pullback. I decided I didn’t want to hold anything over the weekend and exited at the close with a minimal gain.
I currently have no positions, though I may make a few small nibbles today. Many commodity stocks are near resistance levels, but shorting is very risky right now.