Market Was Giving Me An Ulcer

Overnight Europe supreme debts were cured, Belgium nationalized Dexia bank, and the market was in euphoria and free to roam.  The surprise for me was that the green gap wasn’t that big, something like .73% for SPY.  Nevertheless, it gapped above the yellow down-trend line so it was not a good sign.  The market grind higher all day and peaked at 2:00 pm when SPY was up 2%.   I was feeling smoked with my SPXU, SDS, and TZA positions, but the market was teasing with the 50% Fib level, the 100 day SMA, and the doted yellow parallel channel line I projected.  There was no turning back at this point, and I bit and bullet and added to my short positions, increasing from 40% to 60%.

The relentless melt-up was giving me serious ulcers.  I couldn’t bear to watch the market all day and had to walk away from my screens many times during the course of the day.  Even at 3:30 with 30 more minutes to go, the market was threatening to retest the high after retracing 50% of the intraday range.  Fortunately, it decided to sell and with volume spikes to boot.  It ended up retracing — you know what — 76.4% of the intraday range.   It’s a doctors order: take a pill, treat the symptom so you’d feel better but it’s still going to take time for the problem to cure itself.

The closing dip gave me some relief and a silver lining but I know the top isn’t in yet.  The August high of 123.51 and the 200 day EMA at 123.77 are within striking distance.  The bull will not give up right here.  Nevertheless, it’s now a possibility the bears may get a brief respite.  And I can sleep a little better tonight.

PS. BTW, today was a Bradley date, so that’s another hope, albeit superstitious, that today was a pivotal day…

Portfolio Value: $132,000

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