August 20, 2017

Still Holding Strong – S&P Could Finally See the Highly-Anticipated Reprieve

My short positions (SPY, TZA and IWM) made it through Fed day with a small gain, but the next couple of days should tell me if my recent short-term speculation is correct. Mr. Probability is on my side, so I like my odds, but as we all know as traders/investors, there are no guarantees in trading. A high probability is never a guarantee, but that is all I have as an edge in my style of trading (high-probability, mean-reversion trader).

I have to say that I am actually more confident in my current position then I was coming into today. I thought the Fed reaction could stop me out of my trade with a breach of the 1131 area. However, in my opinion, even thought the pop after the fed release was bullish over the next few days I expect to see some decent selling.

Overhead resistance has become extremely difficult for the bulls to overcome and we have several short-term bearish indicators appearing. Moreover, we typically see a sustained reversal after the initial reaction which would mean that the next few days should be bearish. Even more, the next two days are the two of the weakest days on a seasonal basis in August.

The futures are down 4.75 as I write this. When I started the futures were lower an encouraging 7. I am still watching the gap to fill at the $110.86 level. Once that is filled I intend to start scaling out of most of my short position.

Oh yeah, I almost forgot, today was also a Bradley Turn Date. Hmmm.

Until then have a wonderful night!