Check the charts at Trade Guild tonight.
As my late day update suggested, I would have been buying (as we were) leveraged long ETF's. There are individual stocks that can be played and if this bounce seems like it will turn nto an event rather than a quick distraction, then we'll use a laggard strategy which works well with trends that run a week or longer. We'll lso add any setups that are high probability. right now, the bounce itself and understanding that it is likely is the main advantage. The leveraged ETFs are an easy way to make some quick money without the hassle of individual stock picks which can be wrong or right, the ETFs will move with the bounce as long as it moves. This is why we are keeping 25% in cash and have not added the other 25% on the short positions as the SPY did not break our trigger today. So far so good with our plan. We are not closing shorts and being that we are loaded we don't need to add any. If you are a newcomer you should be considering two things, 1) playing the bounce and 2) adding shorts into higher prices, which is more or less a gift for you. We want to be at 50% before the SPY breaks through our trigger.
Do not panic, I talked about the chance we'd see this last night so it is not outside of our analysis and expectations, therefore it is nothing to panic over and at this point I would not be closing shorts, but I would ply this bounce with the long ETFs.
Here's a list if you didn't get in already, you'll want to get in early on the open, even if it's a gap down so long as it does not move below our trigger.
Financials: UYG FAS
Market exposure: QLD, TQQQ, UWM, URTY, UPRO, DDM, UDOW (I expect to see the down outperform the NASDAQ just to bring them all into line into roughly the same positioning when the market breaks so they all break the top at the same time which could not have happened today had the Dow broke the top, the NASDAQ still had too far to go on the downside before breaking the top and to get maximum panic, they all need to break the same day).
Semiconductors: SOXL
China: XPP, CZM
Technology: TYH
Small Caps: TNA
Large Cap: BGU (may be better than small caps)
Emerging markets: EDC
and....
JSDA (see the spread sheet for tonight) looks like it's ready to fly. You may want to checkout the longs of 6/2 as well, any that were limit orders that did not trigger may be decent trades if they do trigger. Email for any updated stops or targets.
New people, I would use this gift as an opportunity to fill out you core/short position, it doesn't mean you can't participate in the bounce as well. In fact playing the bounce can't hurt as it hedges shorts and ultimately should be a bit of extra profit and if the bounce falls apart, you have time to close the positions as your shorts have hedged the longs.
So long as you practice good risk management you can't really go wrong here.
This bounce was one of the possibilities that we were prepared to accept, it does not change anything with regard to our bearish posture. I am warning you now that the bounce "could" carry beyond the targets I laid out at Trade Guild. Think of the market as a pendulum, it swings too far one way and then too far the other. The levels I marked are typical technical levels therefore it would not be surprising to see Wall Street try to shake shorts out of their positions by scaring them and to do that they'd have to take the market much higher than we anticipated, this is a possibility, however nothing has changed in the 3C analysis. Do not let fear dictate your plan. If something changes I will let you know as soon as i see it, but I do not expect we will see anything bullish develop that is truly serious. the fact is this Broadening top has so much overhead volume, so many people trapped in long positions at higher levels, I just can't see there being enough demand to absorb all of that supply and smart money has bot been accumulating (other than today for a probable bounce), they have been distributing and going short in huge numbers.
Look again at the Dow chart now and that of 1929 if you need a little confidence boost.
If you have questions, feel free to email me any time. Now get out there and make some money off this bounce just like we did on the 25th of May when the market made new intraday lows and everyone else was selling, we were buying and made a nice profit in two days.
Keep an eye on the sites tomorrow, although I feel the probability for a bounce is good, our short trigger of < $104.38 takes precedence over everything. Do not be surprised to see a gap tomorrow and do not be afraid to buy it t market.
Now, go out and slaughter the sheep!
