Huge reversal day today. This is the one I had been patiently waiting for and avoiding being trapped into. As I had mentioned in my last few posts I had trimmed down my positions significantly and was anxiously waiting for a pullback. Today's reversal was nastier than I thought it would be, but regardless it was good not be on the wrong side on this major down day. So why I was skeptical about the recent run up? If you noticed last few days commodities market took a hard hit. GLD and SLV charts are liking falling knife, Dollar has holding strong and finally the Housing stocks had started to look toppy. I had posted on 10th Feb that if UUP breaks 22.04 level, it could breakout and we would start to see SPY pullback, which is exactly what we saw today. We broke some key resistance level today including the all important 151.40. If we confirm below that tomorrow we are looking at pullback to 148-149 level soon. I would recommend staying mostly cash until 1) we see nice pullback and stability in the market, OR 2) Close over yesterday's highs. My VXX position is nicely in the money now. I sold 1/2 at 21.77, just as the Fed minutes came out ...a bad move in the hindsight :) Holding rest for now.
Resistance - 152.60, 153.25, 154.65, 155.20
Support - 151.40, 150.40, 149.60, 148.42, 147.40, 146.30, 146, 145.60, 144.50, 144, 143.06
Long - YPF, ARNA, MHP
Added - RKUS short at 19.68
- Took long TSLA in the morning at 39.30 but got stopped out at 38.80.
- Holding RKUS short from 19.68.
New Trade Ideas
I'm looking for some short setups for tomorrow. Here are some ideas -