ES is at 1128 this morning. I had 1135 targeted as an exit for a position trade i've been holding since late October. I may take part off the table at 1130 (ive been holding three contracts)....just kind of eager to get out before next week....not sure what the dynamic will be and would rather play wait and see than go in loaded up.
OK i got an itchy trigger finger. Sold my entire ES position this morning at 1127.50. I think there may be 7 or 8 more points to be had, but maybe not. Seven straight up days, only a couple of days left before year end. I wouldn't be surprised to see others do some selling the last couple of days this week before we enter 2010. We'll see. In any case, that leaves me with 15 SPY 108 Jan puts....not worth much at this point but maybe i'll just hold them to see if the market retraces a bit over the next week and a half.
No kidding! I'm feeling pretty good about getting out at that price. Of course, the whole thing could melt up tomorrow leaving me chagrined, but i doubt it. This is some damn strange market action these days. I feel really good about finally being out of that ES position. It feels to me like the calm before the storm. I have this feeling that we are going to sell off in January. Honestly, I think there is going to be a lot of profit taking going into earnings season. Then, once the earnings reports start rolling in, they will obviously determine market direction. I'm generally a buy the dips sort, so I wouldn't mind a little selloff into earnings so I can get long at some better prices. Anyway, lets see what happens over the next two days -- i also have this feeling that there will be others joining me lightening up before end of year due to a sense of uncertainty around whats going to happen in January.
Well here we are, right where I pretty much expected we would end up (although i turned conservative and closed my position at 1127). Anyway, both my systems are predicting a 5%-8% mini-correction within the next couple of weeks...At most 10 more points on the S&P before it occurs. I am expecting some pre-earnings jitters and profit taking to be the reason/excuse/trigger for what should essentially be a technical event. Then comes actual earnings, which will send the market one way or another....I will probably get long going into that and see how things turn out.
Banks are usually closed on holidays and professional traders and big institution are on vacation. Because of this, two way trading is very limited. That means that prices can move very easily in one direction if any surprise large orders come in.
Usually the market is inscrutable, but every so often it just gets damn obvious what is going to happen. I'm looking for a max bottom near 1080 sometime next week. I doubt we'll get below that.