A Halloween Spook for the Bulls

It was Halloween, the last day of October.  I didn’t expect a down day, much less a huge down day.  I had thought it’s the last window dressing day for the year for many mutual funds.  I guess they ran out of gas.  Or that the hedge funds fought back to make them look less bad.

It started with a sizable red gap.  No idea exactly why, possibly something to do with the MF Global filing for bankruptcy as it was constantly twitted all day.   Not that big a deal in my opinion, but when the market finally wanted to rest a bit, any news could be spun as a culprit.  Quite laughable.  A more respectable reason could be that the rates of the Italian bonds rose despite all the buying by the ECB’s, signaling lack of confidence and that Italy could be next on the default block.  Whatever.

The market stayed range bound all day, but then ended with a late day selloff for a change.  The new uptrend line established by the bear trap doji last week stopped the drop.  Did I exit some?  Of course I did.  It is unfortunate but I had to for, you guessed it, psycho-therapy.  My “no guts no glory” spirit of shorting on the way up through the month of October was long gone after last Thursday’s in-your-face gap-up-and-run.   Bruised and traumatized, I was only short of calling it quit.  With today’s God-given 2.5% relief, I had to assume the “count-my-blessing” mode and exit some.  I had to assume this is another consolidation for the bull, and that the high will have to be retested.   All that said, I only sold 250 shares of SPXU.  I guess the summer-long bear dream didn’t completely die.

Let’s see, the daily MACD still has not turned down and the up-trend line and the horizontal support area still hold.  While I don’t want an exhaustion volume, today’s volume was super low.  Bulls are still holding, but bears’ hopes are rekindled.

Portfolio Value: $124,800

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