The bulls are in command for today. I've been Ripped, Torn and left for left dead in the baking sun; honey strewn about my stripped, flesh-eaten limbs; 1000 degree temperatures...and not a friend left in Miami.
Nah...just taking a day off here while we get this out of the system.
I covered in the opening 20 minutes today - everything short I never owned. I waited that long only in case this would be a case where we gap-up and open at the day's highs, only to drop, drop and drop from the first bell. Once it was clear the bull was really awake, I played run-and-hide.
Actually, I prefer it this way. If we have to see a bounce so soon (yeah, yeah, we were SO oversold, oversold, oversold - well, keep telling yourself that while I wipe the still-fresh blood from the 14,000 foot heights of my nose), I prefer we get it all out of the way in one day.
That's right, that's all you get- one lousy day.
But hey, don't complain. That day is still young, the sun is still high and the prices are likely to close at or near their highs.
That last part isn't guaranteed, but that is how the 1-Day Wonder routine plays out. Shorts cover, sideline cash afraid of missing the next move higher piles in, widows and orphans, who had became widows and orphans again only recently, hop right back on that bull. Volume runs high and broken stocks see rediculuos bounces. Icarus flies toward the Sun - it's a venerable buy panic!
Enjoy it while you can. In this zig-zag market world, you can play the zag all you want. I would too if I had the gumption. But hey, that was 20 years ago. Now I'm just an old toad, satisfied to wait for the next zig-entry. The next chance to short in this case.
If we close at the highs of the day, which I suspect, I'm re-shorting in the final minutes of trading. If we close off of that level, I may scale in some, but mostly in that case I will look to short an up-open tomorrow, somewhere not quite as high as today's highs.
New blood is the safest, until we can see the re-trend lower. That would be the NDX in this case and so I am looking to pile back onto the double-short NDX - QID. Once it is clear we had nothing more than a 1-Day Wonder here, I will look to fire again back into double-shorts TWM and SKF.
If I'm wrong and we blow right to higher highs tomorrow, well, I'll lose a little. I don't see going long then in that case either, but I won't stay in the ring for too much damage if I can help it. The main point is to look for the entry and bail out quickly if things do not transpire my direction.
But I won't be wrong (my opinion). This is not how markets bottom (this so-far, so-fast routine). This is how markets bounce.