Posted in the AM over here
http://www.stocktock.com/2009/11/23/intraday-commentary-11242009/comment-page-1/#comments
For those saying why are we up today if cycle theory has confirmed the top? It’s because the market loves to backtest or stay in the topping area for 2-3 trading days on average to confuse everyone. The trade now is to short the SPY. Why? Because the risk/reward is there. The reward is a sell-off to the 1050-1075 area, while the risk is being stopped out if the S&P rallies past 1125. 5% reward vs 2.5% risk.*If we cross 1125, I would cover all shorts as the market is likely going to the 1150-1200 area before topping out for the year –this event could possibly happen as the 3-month cycle is suppose to peak sometime in december*Here’s how I’m playing it.Limit Orders
SPY Short 1000 @ 111.00 Stops at 112.50 filled
SDS Long 2000 @ 35.65 Stops at 34.35 filled
Market Orders UUP Long 5000 @ Market Stops at 21.94. filled
Not covering until 1075 or December 1st.
