Shake & Bake

At bottoms the market tries to shake out as many weak hands and renters as possible. I was a renter and the market did its best to shake me out of my modest SPY long and then proceeded to bake. Rather than be upset I watch in admiration as the market does its thing. My sole remaining position is a short SPY Put position, so I am participating in a small way in the rally. I suspect the turn of the quarter rally has begun.

5 comments:

Onlooker said...

Yes, well put. I was nervous when you sold as I don't like to be "fading" your trades. With some positions underwater I didn't want to capitulate at this point, but I could understand being cautious with a small position just put on. I was also concerned with the very high ISE equity only number on the open today. But that's always tricky to read in the very short term, eh?

This looks good here with volume growing and breadth nicely picking up. How far it goes is a whole other topic. 1100-1110 is the most "obvious" make or break resistance point that should tell the tale.

Tsachy Mishal said...

I was still thinking we were close to a nice little rally but being a little too cute thinking I could pick up the SPY position cheaper in the next two days.

I am not sure how much weight I would put on breadth because of the Russell rebalancing. A lot of people short the Russell 2000 ahead of the rebalancing

Tsachy Mishal said...

The Russell 2000 shorts are likely cashing in on a nice trade.

Tsachy Mishal said...

And thereby influencing breadth.

Anonymous said...

My belief is this rally only last thru Monday and maybe the beginning of Tuesday. It turns by Wednesday. Then very lite trading into the long weekend. Everyone fearing employment numbers. I'm not buying here. If it plays out as I suspect, I will start shorting early next week.