I decided to add to the short position getting filled at $33.70 on HSD when the index went to 804 which more or less matched the high reached last Wednesday off the Fed quantitative easing announcement. Stop is still at 810, but I will probably look to exit this position if we see 790 today.
I exited the short position at close yesterday at $32.90 resulting in yet another loss. This is the last time I will add to a losing trade. My impression was that profit taking would take hold and there would be a pullback to at least the November low of 750, but it may take awhile yet or some unexpected bearish news to get there. The decision to close was based on two things - first I hoped to get back in the trade at a better price as I sold when the index was at 810 and second I was unsure of today's durable goods order number. Well, the number is unexpectedly strong and I suspect it will be a reason to take back yesterday's losses. However, the action at yesterday's close seemed to be an expectation of another decline in durable goods and further profit taking which may or may not explain the lack of a large jump in premarket futures trade. I'm looking to go long, but will wait until after the open and the first countertrend to establish a position.
I went long in the market on the S&P 500 using HSU at 815 getting filled at $5.64 and also bought 10 Nucor April 45 calls at $1.23 when NUE was trading at $40.85 or so as a play on the durable goods number. I'm not sure of my upside targets because the next resistance levels are a ways off at 840 on the index and the first requirement is that 820 support holds firm. I expect NUE will get to $42 today and may trade out of the position at that time. Stops are 810 on the index and $40 on NUE.
So I'm watching NUE and wondering why it's trading down when everything is up and as I look into it I see last week they preannounced dissapointing quarterly numbers. It's already up considerable from then and I assume shorts are back in or profit taking is now at work. Meanwhile I look at US Steel and it's up 6% on the day - next time I won't be so quick on the gun and do a minimum of research. I'm looking to get out of this play today without losing too much.