Not much to do

If you have your shorts in place, there's not a lot to do right now other then manage the trades and take advantage of any countertrend pops we may get to make some extra cash along the way. The price action the last 2 days is significant and plays right into our core positions. It appears we will see a Head and Shoulders top unfold, s of now, the first or minimum downside target for the SPY should be $87 which makes sense on the charts. However, such downdraft is likely to bring more downside momentum and I have maintained for months now that I expect to see new lows in the averages. Remember, Fear is stronger then Greed so the market will fall a lot faster then it rallied.

The only unfinished business is UNG. The trade is precarious, but it did hold the line in the sand I drew last night. Here are  a few charts and we do have a few positive divergences suggesting upside tomorrow and that may build.

Above is the Trend Channel I use for stops, UNG held the line today which was very encouraging

This is a 2-day 3C chart and very significant in the leading upside divergence or extreme accumulation

This is a 1-dy 3C chart written with  different code, but the same leading divergence

The 15 min 3C chart suggests the downside is over as accumulation has begun again 

The 10 min chart confirms this as does the 5 min chart below.

Here is my proprietary crossover system, all 3 parts of the system still are calling this a long trade. As I mentioned, note the first pullback to the 10-day moving average in yellow and the second to the 22 day in blue, I see this time and time again. Also MACD is positive and the VWAP is in good position as the average price paid over the last 30 days weighted by volume is just above $7.50 (VWAP in red, the top window is a 10 day ma in yellow, 22 day in blue, the middle window is a custom indicator in yellow and it's moving average in blue. With MACD in white is a 22 period RSI which is above 50. All 3 components are needed to place a long position and hold it. Despite the volatility, I continue to believe in this trade. I think it is at an excellent Risk:reward level to initiate a long trade in UNG or to add to it.

Look for updates tomorrow as the market events unfold. I'll be adding selective shorts, but for the most part we already have everything we need to take advantage of the market's stance. Trades will be issued as opportunities arise, most will be quick counter trend trades, there may be some tomorrow night listed. Keep an eye on the site.