As for some individual stocks, PCLN continues to act well. I think it’s only a matter of time before it sees 350. AMZN too seems to be breaking out. It seems to be on its way to new all time highs. Internet stocks are breaking out for the most part. CRM is another stock that has broken out. In fact the number of stocks breaking out is big and that bodes well for the sustainability of this latest rally attempt.

I am expecting a swift rally that may take the market to 1140 or so and then a swift reversal. If it works as planned then both the rally and the subsequent sell off should be over before the third quarter earnings season starts. Time will tell if the market follows this script or writes its own script. It has been a treacherous market to say the least.

In short there is enough fodder out there to satisfy the fancy of both bulls and bears. Market is keeping its cards close to the vest. One way to deal with the market right now is to not even deal with the market. If at all one has to deal with the market than focus on what can happen in the next day or two? What will happen next week or beyond is incomprehensible right now? Though everyone including me will have an opinion but believe me it’s no better than a coin flip. But one thing is a fact that in spite of all that has been thrown at this market, the market has held up remarkably well so far. Now is this predicting anything? It’s another confusion.

The futures portfolio assumes a 25k capital. Intend to trade mainly e-minis. We are not looking to day trade futures but may at times. It’s off to a good start. Already up more than 7500 in less than 3 weeks.

One can see the closed futures trades sent in real time via email by clicking here.

New subscribers can decide to follow any one of the futures or the existing options portfolio.

P.S. By default everyone will be signed up to follow the options portfolio. If someone wants to follow the futures portfolio then they need to e-mail me using the contact link above.

Market reaction to bad news has been great of late. Market internals have been pretty strong. Every dip is being bought. The volatility is being sucked out of the market. In short, keeping a long bias is paying right now.

The levels to watch on the upside are 1114 and 1130. Once 1130 clears then 1170 comes into picture. On the downside a close below 1090 will again muddle the picture. One way to play this market is to keep the position size smaller than normal. This would ensure that one is not caught like a deer in a headlight if one’s thesis doesn’t play out.

These days I am changing my tune more often than I would like but then I am at the mercy of the market rather than the other way round.

As for individual stocks, GOOG as a growth stock is done in my opinion. It has much more room to fall than rise. AAPL seems to be just bidding time to crater. Any rally due to tomorrow’s press conference to address the iPhone 4 issue or upcoming earnings is a selling opportunity in my opinion.

Finally the law of averages caught up with us, we had a slight down period. It was a treacherous period for directional options trading. What really made matters worse was a choppy market. There was too much of headline risk but once we understood the circus, it didn’t take long to bring things back in order.

In the end there was much to learn from this volatile period. Trading is about catching a trend. It doesn’t matter if it’s an uptrend or a downtrend.

You will find every trade in detail when you click the link below.

Click Here

to see the track record

I think SPX breaking 1000 is only a matter of time. This market is in serious trouble. It has been hard to swing trade this market lately because sell offs have been interspersed by rallies. In hindsight all the rallies have been a smoke screen. Shorting rallies is the right approach though picking the spot to short is tricky. If one waits for the prefect spot then one may miss an opportunity. I was looking for 1120-1140 region to get short but market gapped down from 1105 itself on Friday. So better to scale in shorts rather than wait for the perfect spot to short. When market is in sell off mode then emergence of rallies is at the mercy of shorts. If shorts smell blood then they will stay put and market will keep falling. Oversold readings do not mean a thing in this environment. Sellers rule the market and buyers are no where to be found.

SPX 1000 will be seen at the very minimum in my opinion. The way things are going right now even 1000 won’t hold for long it seems. Any rally before this will be a gift from heaven. The first order of business is the Feb lows at 1045. If and when we break those lows, it will be a first for this uptrend to have broken a prior low.

The only tricky thing that one has to contend with shorting is the fear of swift and brutal short covering rallies. But eventually each and every rally is a shorting opportunity. The establishment doesn’t want the market to go down. One never knows when some news will come that would trigger a short squeeze. Remember the gang busters rally on the news out of Europe a few weeks back. In hindsight it was such a massive shorting opportunity.