Congratulations

I received several emails today from members that held on through the plunge and bought at the lows, it was brave and goes against natural instincts, but I think we have a sense of what is happening in this market, although every time you get too confident you get knocked down on your rear end.

The analysis has not changed. I do not see anything of consequence suggesting that this market will not go higher. IF everything that I've seen in 3C over the last week or so is correct, then we have their number.

I read a few places today, "The Bulls got brave", etc. This has nothing to do with the bulls, this was an orchestrated effort by smart money, look at the gap down alone and our analysis that those levels would be taken out to the downside an then we'd get a reversal. Smart money built a position quietly, now they are openly creating volume and breakouts, they are trying to encourage higher prices so they can unload their inventory at a profit.

The market is often about sentiment, this time it was strategic developments.

There could be some early weakness tomorrow as the 1 min 3C charts have gone negative, everything else is positive so unless you are trying to catch every intraday swing, I don't think it matters much. I would continue to hold the longs. I WOULD NOT ADD to them. Remember, this is a correction, not a bull market move. Smart money is selling into it and soon you too should be selling in pieces, taking some profits off the table. Do not get greedy and hold too long. We should see the reversal in 3C, but I do not know if they did the same as we did and set up a larger core short position, if they did, then the change in the uptrend could come very quickly. If they will be building that short position, we will have plenty of time. the point is, hold for now, but if you start accumulating nice profits, take them-this is not  trend, it's a correction.

My guess is that we see resistance around $110-$111-they accumulated up there, but the huge sell-off on the break of $105 allowed them to average their cost down so they don't need $110. However, if $110-$111 is taken out, then we could really see a fast move up and I would definitely be taking profits off the table and leaving a small position in place.

Tomorrow will tell us a lot about where we want to start selling the longs and where we want to add to our core shorts. At $110 (SPY), I should be able to see the laggard stocks and those will be our targets to short, plus the leveraged short ETFs.

For now, be patient and NEVER let a winning trade turn into a loser. You'll have a lot of picks in the coming days, but it's too early now to start targeting shorts.

We want to behave as Wall Street does and sell our accumulated longs into higher prices, if you have a large enough position and can do it 25% at a time without commissions eating profits, then that is what I'd do. I'll let you know when. Don't panic if you see early weakness tomorrow.

Areas of interest on the SPY:

$109.40 area, $110, $111.50 $115.20 and any whole numbers like $112. Each time one of these is broken to the upside, it will cause shorts to cover, which creates an imbalance in supply/demand and leads to higher prices.

A final word of caution, making money is addictive, so much so that people are reluctant to let go of the stocks that made them the money and we find reasons to hold-DON'T! The new normal on Wall Street is Fear-we saw it this morning. Do you have any idea how many people dumped positions when they should have been buying and how many are still sitting on the sidelines? Those people will be buyers if the rally continues to advance for a day or two more, the more spectacular, the more that will be drawn in, but they will buy the top, we'll be the ones selling to them. This site is not called Wolf on Wall Street for nothing.

Hopefully you are finding a new perspective, one that takes you out of the flock of sheep and makes you a wolf in the market. Those who emailed me today with the gains they made, you are the wolves.

As always, email me with any questions or suggestions you have.