Weird Day, Favoring the Bull

Bad news over European sovereign debts during the Labor Day weekend (with European market down over 5%) caused a near 3% red gap this morning on an already oversold market.  It imposed a dilemma on me: we are not at target but the gap down was too great to not do anything about it.  So during the first hour I took 300 shares of SPXU off as a token profit taking – yes my position finally turned green after the last 2 sessions’ selloff!  Again, it simply proved how bad my entries were.

The market proceeded to rally after the opening volatility.  I was absent during the rally as it was the open house on my son’s first day of preschool.  The bounce corrected a bit while I was taking a nap — I had a big headache all day.  And finally the market rallied strongly into the close, almost negated the 3% red gap!  The SPY finished just down .74%!!!

I am glad I missed most of the actions today because I might have done something foolish otherwise.  I am now 40% short.

The MACD on the SPY daily barely budged during the sell-off in the last 2 sessions.  Then we have the rally to the high of day in the last 30 minutes.  Therefore, it looks like we may get a green gap tomorrow.  Another round of battle may begin where I look to short more on strength.  Hopefully it won’t be too painful.

Portfolio Value: $131,200

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