Monday, July 23, 2007

A weaker market under the mask

Today on paper, we had a great market, Dow up 92 and S&P500 up 7, Nasdaq only up 0.1%, but it's worse than that, both my IWM and MDY calls went down hard at the end of the day. This tells me something.
  1. It looks like the market is again showed weakness. Just like a few weeks back, in late June.
  2. So I expect a pullback near term, just like late June, if not bigger.
  3. Earnings will sure put more fire on the move, we should break the range (S&P500 1530-1554) soon, as early as tomorrow to the down side.
  4. So my action should take the calls out today, and I didn't. But don't let one day mistake ruins my judgement.
  5. This is very important, if I was wrong, just correct the mistake by selling the positions.
  6. After that, I can decide what to do next, currently I'm leaning to short again.

Edit:

I checked, the last time we had a IWM down and S&P up, was in May, and finally the IWM and MDY caught up with SPY higher. So this is still a possibility. If this is not the end of this bull run, we'll have another push higher to new highs.

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