Although the SPY short trade immediately moved in my favor last week, yesterday I saw the DOW Dec. futures contract trade above 10,000, which showed renewed strength and I covered my position for a profit. This proved to be the right move since the market proceeded to move higher and would have put me in a loss had I kept the trade.

Good trading,
Darryl

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For some time I’ve been watching the S&P 500 for a turning point in the current up move.  One of the key reference areas I see as strong resistance is 109.68 in the SPY (the S&P 500 ETF)…this is because there was an unfilled gap left there from October 2008.  Yesterday that gap was filled, I went short, and the market quickly moved off that area.  Today we are down over 10 points in the futures contract.

I always say that the market moves in probabilities, not absolutes, so I see a greater probability of the market making a sustained move down than continuing up.  However, if we do break above yesterday’s high, I’ll take the trade off and either reverse my position or wait for another good short opportunity.

Good trading,
Darryl

Note: these statements and opinions are for informational and educational purposes only and do not constitute a solicitation to buy or sell any security.  By viewing this blog you agree with our Disclaimer.