Today was very hard on the bulls. Glad that I have been getting progressively more bearish in my portfolio. I have had changes in the bullish portfolio and I know that the market really appears to be changing trend. The SPY and the IWM definitely had negative days and we have officially changed trends in the SPY as we now have a lower low and a lower high. 105 is the next support with 102.50 poPtentially being closer. Based on the Bear Flag pattern that completed today 102.50 is much more likely. The IWM is also showing the same trend as the SPY. IWM is at support now. If 59 breaks 57 is the most likely stopping point right now.
I am expecting a brief respite from the selling but we should see some more later. The QID trade closed today with the sell signal. That makes 2 for 2 and roughly a 2.5% gain on average from the 2 trades with each trade averaging 2 days. I will be continuing to trade this system for the time being.
HSP closed today by hitting my stop. Counting the covered call this trade made about 3% in 3 months. I was hoping for this to work better and would like to have retained more of my paper profits but trading the trend that is in front of you and what the chart says is the way it must be.
MGM will be closed tomorrow morning as the stock price violated support.
VPRT was closed as well as it reached my stop.
PETS is close to being shut down but has not violated the line in the sand.
XRT is also close to being shut down as well.
TEVA is still in play and was up on this very bearish day. The covered call is still in play.
UUP is still very bullish. If there is a close below the low of the day today I will be closing the trade. As long as UUP stays bullish the markets do not stand much chance of rallying. I am expecting this to stop between here and 24. It may trend sideways some before continuing this upward push. I actually would like it to do so as that will allow the trend to last longer.
I entered a bearish trade in CAT yesterday. This trade is looking very strong and I used a March Call spread to trade this symbol. Almost 50% of the max credit received already.
The DIA call spread is looking very strong right now. I am expecting to be able to close this next week for nearly a maximum credit, not my normal 80% of the max credit. This will allow my net trade on the DIA this month to show a reasonable profit.
QID was closed and I am looking for things to settle down so that another trade can be taken.
All in all I am still very profitable and I am keeping my losses within reason or usually smaller than my gains. Would just like to see more successful trades right now. There has been more failed trades than I like but this happens to trend followers when the market is changing directions.
One final note, should the Dow break 10000 I am expecting the short term move to go to 9500 but a much more significant downtrend is likely to develop. The government debt issues in Europe and China's current moves are beginning to change the tone of the market. The government debt issues are significant and I don't believe this is over until the balance sheets of the majority of the world's governments, including the US are corrected. This will take years. This does not mean that the market will only go down but sideways can also occur.