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As sometimes happens, we get stopped. This happened today. My thought that the market may follow through to the downside was correct. This market stayed true to itself though by frustrating everyone today with a very light volume rally (more like a massive rip). Bottom line , you don’t care, nor do I, if you make money on light volume or heavy volume. I get that.
I have however, been to the alter of hope more times than I would like to remember, and many times these rallies fail even harder within a day or two. Obviously it was a huge short squeeze today, and charts that looked ready to snap lower, caught a lift today. If you enlarge the chart above you will see a green arrow. That would be the top of the bear wedge that the S&P finds itself in. That could imply maybe a 1230 target on the S&P if the bulls wanted to lift this thing further.
I traded light today, but still got hurt with some of our shorts. I made some money in FAZ near the end of the day and I got lucky shorting WLT and made a good long trade in PANL. Other than that, I didn’t chase longs and it was tough being patient while waiting for some set ups. All three were mentioned on the chat room.
This market is moving fast and furious again and I don’t anticipate the volatility to stop anytime soon. Clearly this has been a challenging start to the month ( the worst since I remember) and my motivation is to get that turned around. I am still personally short (1/3 positions) on the existing list, but in the spirit of honoring the P&L for you newer folks I have stopped out the P&L. I will revisit these names short if this market decides to roll over again. I still do not trust this tape, but I’m not going to fight it either.