An Up Day Can Be Bearish

As I explained in depth a Trade-guild last night, a move above $110 in the SPY would be very beneficial for our short strategy. Today we got that. It was a lot weaker then it looked and really almost perfect, although I'd rather it broke and held below $110 today, as it is, probably Monday or early in the week. Read the last several posts for our strategy regarding that. I'll be posting more this weekend, right now my fingers are sore from being on the computer watching the market all day. It was a good day for us.

As promised, the new July/August list is up, just click on the link to the right to open the spread sheet. I'll be adding more ideas over the weekend, but for now there's quite a few for today-rather next week if you didn't enter any today.

As the MCD trade and about 6 others we hit with 3C thus week showed, it is indisputable that earnings are leaked, they can be successfully traded so we have a new tool in the tool box. And hopefully you have a better understanding of just how corrupt this market is. I called MCD a short yesterday, they BEAT! And still MCD was sold off. 3C didn't tell me if they would beat or not, it just told me that smart money moved out of the trade before earnings so they knew what would happen.

Check out the list and check back this weekend for more.

For those that are not on auto pay, WOWS will be resetting the 30 day membership this weekend, so if you are not current, I'll send you an email if you'd like to renew, but access will not be available after this weekend. If you are on auto pay, then you can disregard this notice.

I thank each and everyone of you and I appreciate all the emails, it keeps me going at 12 a.m.!

I know it's bumpy, tops always are, but we are on the right track with or long term goals and if you really understand the risk management post from last night, then you should be able to comfortably go to sleep every night not worried about a trade.

If any one has questions, please-it is what I am here for, not to give you trades, but to help you be successful in the market. I'm not hands off, I'm here for you if you need it.

ADD BAC TO THAT LISTt

BAC is in excellent position here for a short with high probability and low risk. If you want to wait and see how the SPY plays out and consider going short if/when it breaks below $110, then that would probably make the most sense.

It Did It!

I don't know what the impetus was but the SPY finally broke the $110 level, it came almost out of nowhere on a diminishing volume rally. right now it's at $110.15 and as I mentioned about all the orders lined up there for market makers and specialists, volume increased by at least 6 times the previous volume and around the same amount compared to the 50 bar 1 min moving average. Now is the time to watch for a break down below $110. If we don't break below today, then we have to reevaluate , but if we do, remember the plan that I posted a day or to ago (I think last night). A break back below $110 should lead to a rapid decline.

Euro Stress test fails

Here are several trades that could work, although I don't know the actual per bank results.

RBS Short and HBC Short

UUP long

You'll have to keep an eye on this as the results are out, but the market still has to internalize them.

European Stress Test

I don't know if this had anything to do with yesterday's very bearish looking, bullish acting market, but in less then an hour, we are doing to see the results of the European stress tests on some 91 banks across 20 countries.

I looked at about 5 of these banks that trade in the US yesterday and didn't see anything in those 5 that looked bullish, in fact they seemed bearish looking to me.

This morning the Dollar is up against the Euro and this chart suggests that there may have been accumulation in the dollar for sometime. If this chart is correct, then UUP would be a decent long and if the results of the stress test are poor and UUP may be an indication of that, then it should perform even better. We'll know soon enough.

A Few Trades

I'll be putting together the July /Aug Spread sheet this weekend,

Here are some trades I like right now and they will be on the SS.


AAPL Short with a stop @ $266
MCD Short with a stop @ 71.75
GEX Long with a stop @ 20.08
WTR Long with a stop @ 18.50/ this is a limit order trade although you could buy at market, I'd prefer to buy a pullback to 19.07
GLD Short with a stop @ $118.50

Still in the PRSP trade, earnings beat, they have a conference call at 10:30. If you want a quick trade, you could buy now with a stop either at 33.20 or mine at 32.85. For an upside stop use the 50 bar moving average on a one minute chart.

The market appears to be in bad shape as I mentioned last night

still holding PRSP

there's support at 32.97 so a stop under that at 32.85 or so makes sense, still trying to hold for the cc

Update

I would continue to hold MCD short and the market thus far is doing what we need.

still holding PRSP

Conference call at 10-if it makes new intraday low will sell, but it gapped down with the market so hopefully we can make it to the CC

Goods NEWS and Bad

First the bad news, I'm I city from the Tropical Storm Bonnie Warning Advisory, meaning that they expect Tropical Storm force winds 1 city below me and about 6 driving hours south of that in the keys. So it is possible we may lose power, if so I have back up resources and hopefully will be online all day-

The good-MCD which I posted a sell short on beat earnings and is still down in premarket trading so 3C called it right, they are selling it off in premaret.

PRSP which was a long earnings call yesterday beat and appears to be ready to open on the upside, if it's big, I'm taking half off the table at the open and will watch the rest.

More soon... I hope:)