Today was the day for the harvest!
From the times that I was sharing all my trade entry and exits along with my portfolio performance, my fellow followers know that I aim to have a balanced portfolio. While turning short on the index at various times, I tend to keep some of the good companies at some %’s incase if I am wrong on the direction. This time it was different!
Acknowledging the price target of 270-275 range weeks ago, I turned to short position couple weeks earlier and got in absolute short position on 10/2 with various puts and SPXU . In the previous session, I have acknowledged my portfolio as below.
I am short on SPY with SPXU and SPY 10/3 291 puts.
I am short on ROKU, CRM, DHR, GPRO, SNA, FAST, TXT, HRS, XYL, JEC with 10/19 puts
Congrats to all who were able to hold the short position until this point
I closed the ROKU, CRM and SNA puts just yesterday with good profits while missing today’s action… (well sometimes it is hard to maximize all)
I closed % of my 287 10/12 SPY puts and portion of the SPXU position around 280.4 range today and still holding 70% of SPXU position equivalent to 210% short SPY with various SPY puts.
I have also closed HRS and GPRO short positions towards the end of the day today and activated RTN puts in the morning and added to my JEC puts position.
Overall with all these pure short positon and puts this wave was a remarkable one that I will remember for sure and this may not be the end!
Lets take a look at how this wave is progressing!
On October 8th I sent below twits for Tuesday;
acknowledging a fast move to 283.5 level coming. There were two possible scenarios at that time decline to 283.5 bounce and go side ways as discussed on 10/2 session, or continuation to 270-275 level directly.
Yesterday’s closing provided a higher degree clarity and I have acknowledged this with the below twit
The way it was progressing was aligning with a straight fall to 275 target with a weak resistance at 280ish,
When we reach this support level, I reduced % of puts and little bit of my SPXU position. But the support was weaker than I was expecting and the market continued to melt down
How is this going to shape the new pattern is it over or going to deepen?
Now I have captured 2 new alignments for this faster than expected move! For me the pace is a very important factor and today was too fast to align with 1-2 week 270-275 target and reverse! Below are the 2 new scenarios I can tell and my strategy.
Option 1: Lower opening, testing 275-276 range and strong 1-2 day bounce back to 284-285! and choppy side ways. 1 day up 1 day down move between 280-285 and reach 290 in couple weeks and down again around 270-275 to end this correction.
Option 2: Lower opening and continue down, accelerate below 270 to lower than January lows. With the pace I am seeing this is not a very low chance any more!
We have to be really cautious below 270. Although I still want to say that Option 1 has higher chance of occurring, today’s move has increased the chances for Option 2 as well. (similar to August 2015!)
So what will be my strategy? How am I going to play this?
On a lower opening ideally close to 276 range, I will close 1/2 of my SPXU position and SPY puts to lock the profits.
Key fact for tomorrow is, I think in the market will continue in the direction that it goes in the first 1-2 hours. If I see a negative start turning to positive I will cover all shorts and go flat. ( I don’t have any appetite for going long at this point, I plan to stay flat and enjoy the profits of this wave and enter index position again after tomorrow or 1-2 days
If market continues going down after a gap down opening, I will hold the remaining 35% SPXU position and add puts ideally below 270 for a potential melt down (it would be difficult to add there really 🙂
I am short on SPY with SPXU (70%) and various 10/12 and 10/19 puts
I am short on RTN, JEC, TXT, XYL, FAST with 10/19 puts.
I have been debating to dedicate my time for providing market updates based on the interest I have been receiving.
Honestly, there were some times that my motivation level was going up and I was trying to share all my trades, portfolio updates, every move i made momentarily. There were also times that I was questioning the amount of effort I am putting as it is taking a lot of time from me.
My followers feedback and acknowledgements about their gains were always my main motivation to keep on sharing my provisions!
This week was a great hit on target we all made money on a falling market ! and I definitely believe the synergy I am receiving from all of you is helping me too
Today, I decided to place an appreciation box to value my efforts. Your considerations will definitely boost my motivation to devote more of my time on providing detail market analysis and will also be used for the improvement of this sharing