After three day’s of bullish counter trend rally, the monthly job report surprised and the market was poised for a green gap. I was looking forward to short the gap because the market is stretched and the 50 day MA is within reach. Unfortunately, the gap wasn’t big enough for me to deploy sizable fund to add to my SPXU position. I just had a token add at the open (100 SPXU) and 500 SDS for my IRA. The market quickly closed the gap and proceeded to test the new high but failed. Since I already added 6% on the 20 day SM yesterday, I really had no action items for the remainder of the day. I’m now 27% short.
The market faded into the 20 day MA support, came back up shy of the high of day, then sold off into the close, a tad below the 20 day MA.
I’m not happy with the market because I’d rather a bigger gap and get the rally over with. Now today’s price action could provide the bulls a chance to consolidate before moving up again. The MACD on the SPY daily is now officially registering a positive divergence in favor of the bull. The only thing hopeful out of today was that the 20 day MA didn’t hold into the close.