today was an interesting day, but ultimately ended up bullish by the close. I actually closed my long positions that I had over the past few days before the open (just saw too much weakness in my analysis last night). In the first 30 minutes of trading we saw the market jump up, then proceed to tank shortly after. I spent most of the day shorting the market (short term day trading) cautiously making pocket change throughout the day and more importantly, watching to see if the market was going to continue its’ downward decline.
For a short time, I thought we were going to see a large drop and a possible setup to head down to the recent bottoms from last week. But I noticed the decline weakening mid day and closed most (not all) of my short positions.
In the last two hours we saw the market starting to rise and ultimately close flat for the day. After running some quick analysis at the close, I see much more strength than I did yesterday at the close, it looks like we are building a base here. We have more or less been in a fairly large trading range over the past four days. Although I dont expect us to break out of the range for a bit, I do think we will to the upside.
I purchased some leveraged Russell 2000 small cap ETF’s at the close (going long), so overnight I am sitting on both short and long positions which is a bit odd, but so is the market currently. Until the market decisively makes a decision, I think there is profit to be made on both sides of the market. But if the morning goes the way I think, I expect to close my shorts first thing and stay long on the market.
There is still an incredible amount of skepticism among the big players and most of them are shorting the market or just sitting in cash waiting for the market to make a decision, so … that ways on me and the market unfortunately.
Although everyone hates waiting, as I mentioned previously … it is healthy for the market to pause and calm down after such a big decline. Once everyone becomes disinterested and goes on with their daily life, we can resume an uptrend, which might take a bit, but my thoughts have not changed much over the past week, still cautiously bullish.