Positive Open
    Every indication is that the market will follow-up with a positive open today. For the bulls, the key mission today is to extend and defend their gains. They have been ravaged over the last four weeks and need some positive action in order to take control. For me, I will be watching to see if this is the expected 2-4% rally that will draw money into the market before the bears retake control. As I outlined yesterday, a decisive close above 13,200 would help the bull cause.
    My plan for today is to ride a select handful of the momentum leaders higher. After booking a quick gain, I will move to cash and watch the market action. If the DJIA approaches 13,150, I will begin buying DXD (Double Inverse Dow). I will continue buying through 13,250 and would close if this position if the DJIA moves above 13,300.
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I’m thinking along the same lines but more with the S&P than the Dow. There’s going to be a nice battle at S&P 1440 today. If the bulls can hold the line, we should see some improvement in the market. I’m in your position. If the bulls can hold 1440 decisively, SPY calls may be worthwhile since the next level of overhead resistance is near 1470. If not, we could see the S&P retest near 1400. I’ve only been doing this since the summer, but I’ve learned that you must be very nimble in a market like this.
NASDAQ up 2%, S&P500 up 1.7% as of 10:32 AM, to me though it all comes down to the typical 11 AM sell off coming around the corner. Curious to see how it turns out. If the market holds up then we should finish out the afternoon nicely. Financials are leading right now with GS, AIG, WM, and MS all up over 5%.
Relatively speaking, it looks as if things are holding up. I have some SPY puts in place just in case the bears grab hold of anything. It feels great going from a fundamental trading style to a technical one.
I’m speechless at the run we’re having today. I’m even more speechless that we’re holding up so well approaching the close. Hooray for SPY straddles!