Eaking out a Gain

Things I did today: 1. put together Alexandra's crib and 2. managed to stop the bleeding on the account. Doesn't sound like much, but I'm tired.

I hedged this morning by going long the IWM. The the market gapped open, so of course I got a lousy fill (what's new). Then I noticed that the opening high wasn't taken out after the retracement, so I started to prepare to take profits on the IWM, and then to add to my short positions in the SRS, QID, MZZ, and TWM.

From the bearish point of view, things went well until noon or so, when the market began climbing again. I decided at this point this was nothing more or less than a retracement which would eventually fail so I decided to stand pat and sweat out the paper losses. Luckily I was proved correct and around 3pm est I started getting my breakdowns. I added more to QID, then I started building the crib. I checked back after closing, and I had just a tiny gain which was a victory because I had quite a nasty loss at the opening.

Also we got some good news vis a vis the US dollar index which finally breached the 81 level (sept. contract). If that level held I would have thought the dollar would be turning for another drubbing (EUR/USD 140, anyone?) but at least for now it looks like the USD could be set up for more upside testing...as a trader I have no positions, but as a European traveler I care a whole lot! I'd love to see EUR/USD parity again, but I'd settle for 110 or so...

If yields start to spike again, maybe that would help the US Dollar...talk about finding the silver lining...


Again with the S&P 500 in choppy turmoil, it is critical to return to basics in terms of trading discipline: we are below (just about at) the 10-day EMA, which is below the 20-day EMA, which is also below the 50-day EMA. This is a standard issue bearish reading for the trading of moving averages.

On the bullish side of the ledger,the s&p could be tracing a double bottom. Also on a weekly basis the averages do look oversold. But until it can surpass and hold above the 20-day ema, this sucka is a bear and every rally should be sold.