On the 27th, I laid out my scenario where I thought the market was headed.
http://bobsstocksignals.blogspot.com/2015/12/new-year-resolutions.html
This road-map was months in the making. The market indexes were being levitated by Central Bank/proxy buying while the interior of the market was falling. There is a mismatch between the market and junk debt values, and there was a gap to fill.
Chinese selling overwhelmed the buying.
First up was the gap fill, and based on the market weakness it is likely filled this morning. Now unless we go to full on crash mode, seasonality tells us that the Thursday prior to OPEX is a low for the next 6 trading days. I will look to exit my short positions today if I sense any recovery.
We were tactically positioned short the market, with options so looking to reap some nice rewards. We use a double smoothed momentum (hourly time frame) signal that keeps us mostly on the right side of the trade. I use options for more leverage, and we are already up hundreds of percent over the last two weeks.
We are still short
IWM
XLE
SPY
and long
VXX
If you are looking for some nice profitable set ups sent automatically to your phone, give us a try. Only $12.50/month.
Enjoy the bloodbath.
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