Remain short with the 2x index funds, but long in small size the stocks mentioned yesterday and will look to get more long on el dippos.

Despite me trying to catch a very short term down draft, I want to get VERY VERY LONG. Especially things that haven’t moved large yet. There are plenty of these opportunities.

One example:

I like the setups in HAL, POT, BP, SBS, TNE, USO, and a slew of other Gold and Oil plays.

I bought today:
HAL, BP (added), SBS, TNE, USO (July 42 calls). However, I also bought these small/micro cap stocks:
NENG, FSII, ASTC, INSM, PXLW, SCLN, TSEM

Reason: This portfolio of stocks I should have bought a few weeks ago per one of my many “systems”, but for whatever reason, I didn’t. I’m playing catchup and the portfolio was only up about 12% in the past 3-4 weeks. I say only, because for this particular system that is really on the low side of what these mini-portfolio’s usually return in a good trend.

I sold my ERX today taking profits, but will getting right back into it.

Despite these buys, I want to buy more stocks, however, I hedged significantly before the close with SQQQ (Triple short QQQQ), and 2x inverse funds, primarily NDX, but also SPX, RUT.

Why its worth a shot for a short for one day?
The gapped up doji on the NDX.
The RSI divergence on the daily chart.
Extreme RSI readings as well as stochastics.

These items have been reason enough in the past. The ingredients are there for a down day. Again, I’m not a permabear by trying to catch a down day. I have no delusions of grandeur thinking the Dow is going to 900.
I want to be more long, just don’t want to buy it all up here.

I got into SPY and IWM puts as well as TZA. I wish I didn’t. Losses in all of that. Never had a signal to do it on an intraday basis, but the daily is setup for a move, I don’t know the size of the move, but 1 day should give a red candle. Once this is overwith, I am ready to get back long. In fact, I want to buy certain stocks now even with the overbought condition. Particularly the quality laggers. I did buy 2 today plus one energy etf.

BP, PFE, ERX

Oil and gold are the plays everyone is talking about now. I was in them 2 weeks ago, took last week off, and now this is the week where they are acting well again. This is a train I want to get back on.

People are talking about the inflation trade based on FED speak, so we will see gold, oil, and maybe the soft ags do well. Coincidentally the TIP (TIPS) etf is turning UP on my screen this week. Interesting coincidence you think?

I also want to buy a combination of mostly quality dividend payers and some microcaps that are setup right.

Hence, the BP trade. Some others I’m on board with are:
JEF
HAL
GOLD
CPBY
CCME
GNA
MUR
PM
MRK
LLY
ETP
DNR
ACI
POT

Too many to name. I’m entering swing mode and will ride trends. Hopefully, though I get a down day tomorrow for my 2x inverse position.

There is a good chance with today’s rally to even, that I will get that SPX close below 1145.61. It is what I’m playing for. On a drop to those levels or lower, I want to be a buyer.

What I’m buying is going to be of the conservative boring Dow stock variety. I’ll post it when we get there.

I put that cash to work at the close and went back in heavy short in the NDX/RUT 2x inverse funds with more of a RUT tilt. This time I also added IWM puts, TZA, SRS, and SPY puts to the mix.

The trend is still ok. There is nothing saying that is changing. This is a “finesse” trade inside the up move. Sometimes these trades are stupid. We’ll see. Of course, trends change after a new high is made, so its possible here that “could” happen. However, as of this moment, that is not the case.

On a weekly basis the market is not that overbought. It could go much higher. On a daily basis, we are seriously overbought. Check how very high RSI levels resolve. Its done quickly. There will be a smack down day very soon. I’m betting its tomorrow or starts tomorrow.

I also experimented with more of my 1 minute chart trading. That was waste of time today. Lost money doing that.

Traded IWM puts most of the day, was up quite nicely on the break lower in the morning, then chopped around all day and gave back that gain and then went into the red. However, at the end of the day I caught the last trend down with IWM and SPY puts (did not tweet, but tweeted everything else). Ended the day as a slight loss. Alot of work for that.

I tested out today trading with 1 minute charts and utilizing something new, and I think on a better trending day it will work out. I also may have overtraded. Well I definitely did. I could have walked with the gain this morning.

What I wanted to do was be more short than just the index funds. Owning puts in the SPY or IWM, plus buying some of the 3x inverse etfs. This would be based on the daily overbought condition. In the past I might have done this, but now I’m going to see if we possibly gap up to 1150 SPX and fall. The SPX carved out some top resistance today “coincidentally” in an overbought condition.

1 day drop potential:
LVS, AAPL, XLF, and 390 more.

All of this could change on the open, but often the move will carry over. Especially when some of the overbought conditions are in play. We’ll see if this works in a few hours.

The 2x SPX long was purchased on 3-5 and getting out today yielded less than 1%, but a gain none the less. For whatever reason I didn’t buy the RUT or NDX. Well the RUT looked like it was too far ahead, but still, those are my usual plays and they did better. I was a little fearful of the “overboughtness” and didn’t want to be locked in with size. Because at Rydex that is what can happen.

The market is overbought. Great we all know that right? Some have been saying the market has been overbought for weeks, some months. It hasn’t been. Today or tomorrow will offer a great 1 day trade to the downside. If that happens tomorrow, I want to be a buyer into Friday.

If it doesn’t then I want to stay in cash or possibly take an extremely short term short trade.

Today was great for certain stocks of mine and I had to dig out of a hole due to the USO calls being nailed right in the morning. The C calls I sold for 210/220% was a great trade. The worst trades of the day were my day trades of FCX puts.

Oh the one stock I own is INSM. Part of a strategy that I missed buying a few weeks ago. I like the pattern as well. Probably not affected by a blip in the indexes.

How does one go from being bearish on February 23rd, explaining my reasons on Feb 25th why I am turning bullish, to being bullish on Feb 26th and buying things for the following week?

First you need to have a “system”, trading plan, whatever that tells you what you should be doing.

Second, you need to know that it is good. Backtest, forward test, whatever. Make sure its robust.

Third, follow it. Most important step.
———-

I’ve said it before, “you have to be dumb to make money.” Be dumb, follow a plan, don’t over think it. The yokles on those bear blogs have been bearish for literally the entire move up from 1 year ago today. Be dumb.

If you have a signal, a reason to play a stock, whether its a chart (its always a chart for me), or a fundamental reason, just do it.

———-

I cut back my longs purchased at the close Feb 26th from being 75% long 2x NDX and 2x SPX to 30% long 2x SPX, on Mar 5th. Everything is long and everything is up. So why am I cutting back? Its a management thing as the market is a little overbought on all indexes. Certain stocks are not. Certain stocks are. Lots of weekly breakouts setting up, so I want to be a buyer as the market comes in.

Why not get out and just get back in? I used to do this, and sometimes it would be too difficult to make that decision. So I leave a small amount in the trade in case I’m wrong and maintain an attachment to what I should be doing.

Based on the dumb principles, I bought RIMM – not in a large way. The calls that were purchased on Friday were sold for 150%/173% gains (not including commissions). I bought more calls, but the April’s this morning. Sold a half for 57%.

The same dumb principles got me into DIS, as well as other stocks. Including ICO, which dumped on me this morning due to a secondary offering. I lost 7%, yet its still on a buy. I’m not being dumb on my exit. I don’t have a reason to get out of ICO other than fear of losing more than 7%.

I’ve included a menagerie of screen shots to piece together my thoughts, the trade, and maybe you get an understanding. If not, you can ask questions, and I may or may not answer.

Current positions:
-30% long 2x SPX (looking for a market pullback to get more long, will include NDX, RUT)
-bot C April 4 calls
-DIS calls (trimmed down even more of that position today for 144% gain. The last bit I’m letting run.
-bot DSX, EGLE
-rolled my IBM calls to further out strike and went even smaller on the trade.
-bot INSM, PXLW
-still have that small piece of RIMM calls (will look to buy back, with a pullback tomorrow as the trend is still CLEARLY up) Be dumb, don’t be an idiot.
-bot USO calls (I sold them due to fear midday that my profits were deteriorating, got back on the dumb train, because the charts say so)
-ERX still holding in other accounts. Would like to buy this one back for my main account also.

I also want to be a buyer of gold again as I sold out of my gold positions last Friday.

Today I bought a few things from some of the charts I posted to Chart.ly last night.

-FST and sold some calls against it
-ICO

-DIS calls, can’t find a reason why I shouldn’t be long the stock. There are many right now like this.
-CHK /NG futures looking like they want to make a short term move higher and the daily chart has that 21d spring thing going for it. Very similar to JASO chart below.
-JASO (Got long today due to daily chart, but the weekly is up on my signals and only 2 cents away from its buy signal. High beta play, if my theory on Crude/Coal moving higher, Solar tends to react.)

I’m very long here, being dumb (in a good way), just following trends.

Currently long 2x index funds, DGP, ABAT, USO calls, ERX, CLNE, CZZ. If you want the particulars, check the twitter feed.

These longs worked out. I cashed them though at the morning pricing around 10:45, and took my gains. It ended up being a better hold till 4pm. DIS calls went out at a profit, was looking to get back in, but waited. I was in and out with DGP, sold for a small loss, but went back in eod.

Market has broke out. How long it will last is anyone’s guess. For now swapping from a bearish bias last week to a bullish bias this week has paid off. I think we are going higher – for now. Likely to come from a dollar pull back and euro bounce.

Many charts did this and is why the market is teetering for me on being a long or short trade. POT, AAPL, GLD, etc.

It is also why I’ve been trying to game the move ahead of time, but because of the volatility its been a losing game. However, any way you slice it today’s action was bullish. The market needs to hold it though.

We could wake up again tomorrow with the same red morning, but the charts are up until they are not.

-If I don’t see a large down close tomorrow, I’m getting long. A small down move that doesn’t change my signals I’m long.
-If we go bonkers to the upside tomorrow, I’ll reluctantly take a long.
-If we are slightly down and my signals stay green, I’ll go heavy long.