Sit

What does the market really think? What does the majority of the traders think? That's the question I should ask before I added too many positions on Tuesday. If I can not only check charts, indicators and past patterns, but also ask the question, then I can improve my timing and reduce mistakes.

1. We sold off hard on Tuesday, and I thought this was the test of the recent low.
2. But wait, we have the "Bernanke put" coming, traders know there is a Fed cut coming, so in many traders mind, that should be enough to buy on big sell off like Tuesday, at least not adding shorts. I failed that.
3. As a result, today I could not put the trigger to commit more. If I sold on Tuesday before close, I got profit from the puts, and I could add today.
4. Now I need to ask, bearing a surprise Fed cut tomorrow, what Ben can say tomorrow that can trigger a great rally? What's the outcome of tomorrow's market reaction?
5. Even Ben promises a cut, I doubt we'll rally big.
6. And CNBC bills Ben's speech as the biggest in his career, almost telling people again and again, Fed will kill the bears and rally the bulls.
7. I don't know, pin too much hope on one single speech may disappoint bulls.
8. Think about this, traders won't commit too much ahead of a long weekend, knowing all the issues are still out there. Another shoe can drop any minute.
9. And if the economic forces are stronger than Fed, I don't think they can cure it with rate cuts.
10. Unless, of course, the economy is stronger than we thought, we'll work all the issues out, with Fed's help, then we'll rally from here.
11. I happen to think the issues are real, and we need some kind of adjustment in the markets before we resume the rally. So a correction is very likely. Bear market or not, the jury is still out.
12. So this brings me back to my old idea, the market will test recent low, when and from where, I don't know. Fed can delay this, but they can't prevent it.
13. So I'll sit on my shorts and puts, on the edge!
14. If the market rally from here to new high, then I'm dead wrong and will kill me again! I don't want to take it on the chin again!
15. Another surprise is the VIX, it's up with market up, very strange indeed. This happened before the August 16th. On August 8th, the market was up big, but VIX is pretty much flat (not down), and on August 10th, the market was up and down, but was pretty much flat, and VIX rose! Like today!
16. VIX is telling us a storm is on the way.
17. But you never know, maybe this time Ben can save the market again and cure the credit issue along the way, and VIX will go back in teens in no time. If that's the case, we the bears will be in big trouble.
18. Before that, let's put on a brave face and see if Fed can rally the market.

Take it on the chin

What a difference a day makes. Today Dow up 1.9% and Nasdaq up 2.5%. Yesterday we were disappointed by Fed minutes and today we were very happy about Fed's comment to "act if necessary".

1. There is nothing changed since yesterday. Traders' mood changed.
2. How can we down 2% one day and then next day up 2%? I think this again taught me a lesson, don't be so sure. That's when you're blind and taking unnecessary risks.
3. Once you started to think you're in sync with market, the market kicks you hard.
4. I'm back in the wait and see mode, and with all the puts and shorts down big today.
5. Even though I still think we'll head lower to test low, today's market action shocked me. I expect at most a 1.5% gain, but 2.5%? Probably people knew Fed will cut early before Sept.18th.
6. Again for these who bought just before the market closed today, you need rallies to upload your shares, not a good place to be long.
7. So far the market is still down for the week, let's see if the bulls can run us higher this week.

Just the way I like it

Today Dow down 2.1% and Nasdaq down 2.4%. This is just the way I like it. Selling across all the sectors, with relatively low volume, but bigger volume than last week's up days.

1. I liked what I saw, so I added short ETFs: SRS, MZZ today, and added QQQQ and IWM puts.
2. All gains last week were erased by today's action.
3. I think short term, there are three targets on the down side, S&P 1400, this is the closing low; S&P 1370, this is the intra-day low on August 16th, and new low in 1300.
4. Since there is no panic selling, just orderly retreat, I expect the market to go much lower, very likely 1370 if not lower.
5. Of course, Fed may cut rate, but I expect them to hold until Sept.18th. If things are out of control, the Fed will not act until the market bottom. Since the Bernanke put is similar to Greenspan put, they cut rate when market bottomed and rallied, since they want to build on momentum on the upside. Both Aug 17th cut and April 2001's cut have this in common.
6. I missed FXI yesterday, I felt it's the top, but the puts are very expensive.
7. I will watch carefully and see if we can get a real bottom this time and go long at some point.
8. Now I have to think we'll have more orderly selling this week.
9. Once we get the panic selling like August 16th, we'll have a bottom. I'll call it when I see it.
10. The Oct.19th, 1987 lesson is always on us, be prepared for another 10-20% drop, even though the possibility is still remote at this point.
11. Ryan, we're on the same page as how the market goes, I think you're the only reader on my blog. This blog is pretty much my own thoughts on the market, and by writing it everyday, it forces me to learn and focus, to improve my trades.

A quiet week

Looks like we'll have a quiet week with low volume, and lot of traders finally got some time off due to the volatility early this month. But I like the market tone, down it went.

1. All major indices were down, nothing big.
2. Considering how far the market rallied since August 16th, it's good to have a down day.
3. Bears hope it to continue; bulls like to take a break too.
4. I expect we'll pick up things next week, specially the week after that, with most people returning from vacation.
5. And I expect a test of August 16th's low in September.
6. But market can also break out to the upside. So I'd better not to add new shorts until things are clear.
7. Right now, I'll add puts and shorts only on big rally.
8. And keep most in cash.
9. FXI is breaking out yet another all time high. But the puts are too expensive, so I'll pass. May buy put when I think it will make a turn with the U.S. market. Maybe today is the day, but you never know. Hard to pick a top for FXI. It's a short target for me.

Added puts

I added QQQQ puts and QID today, since I don't think today's rally has any strength in it.

1. I don't care how bad the credit crunch is, how bad the CDO issue is; and I don't care how good Fed's timing rate cut has cured all the issues. Let's put aside all the fundamental analysis for a moment. Even though I think they'll likely to lead us into recession soon.
2. S&P had rallied 110 points from its intra-day low of 1370 on August 16th, to close at 1479 today, just 6 trading days!
3. People argued this is the same as Feb.-March's rally off low, this is not. Check history for all the rallies recent years, they usually have at least try to retest the low for a second time before real rally resume.
4. So either we'll test the close low of 1405 or the intra-day low of 1370 in the near future.
5. The only thing I'm not sure is how high we can go this time, do we go to 1490, 1510? I have no idea. But I'll keep adding puts and short ETFs on this leg up. The higher we go, the better place to short.
6. And economic cycles are stronger than Fed's cute timely rate cut, so I'll use any future Fed's cut initiated rallies to add short and puts.
7. It's very likely we'll test the low, and may even break down to new lower low in the near future, probably sometime before November.
8. And if we indeed have a new low, and Fed has not cut again, I'll go long to counter the trend.
9. I think to bet on oversold and overbought conditions produce better trade opportunity than TA and FA.
10. From seasonal perspective, Sept. and Oct. are known for its vicious dives, so for these who bought at the high of today before market closed, congratulation, you need a rally to unload these long positions.
11. I moved to the short side.

Reversal day

Today the bulls showed sign on weakness, we had BAC to add 2B into CFC news, future was up 8.2 for S&P and oversea markets again were very strong, and yet the bulls could not maintain the gain and finished lower in Nasdaq and flat in Dow.

1. This maybe a break for the bulls before the next leg up.
2. I think this is likely a reversal day for the short term bounce and we'll head lower to test 1400.
3. Since we started the sell off recently, last Friday is the first time we had a strong Friday finish in 6 trials. Tomorrow is another day to see if bulls are strong or bears regain the control.
4. I expect we head lower.
5. Again not a time to chase long positions here.
6. The fed will likely to be forced to cut rate, and that can only happen if we have more bad news coming, with market touches new low.
7. If the market holds well, I don't see Fed can cut rate.

Wait to short

The market declared its readiness to move back to normal, and risks are taken care off. Wow, what a difference a week make. Last week, we were talking about crash, Fed's timely rate cut, today, new M&A activities and oversea markets rallies after rallies made bears on the edge and bulls eager to show their strength again.

1. I'll wait to carefully add my short ETFs and puts.
2. Today I added a small QQQQ put positions. And I won't add again until S&P touches my next target 1485-1505 area.
3. Today seems to me bulls took out 1460 area without any real struggle. It's a fake or real take out remains to be seen, but I'll move to the next attack area, 1485-1505. I will add shorts and puts again around that area.
4. Depends on how strong the move is, my position will be small or large again.
5. My idea is simple, the credit crunch issue is by no means over, a Fed Sept. rate cut is already in the market price.
6. So any break out from here with low volume will be a welcome news to bears, if you can select your entry price right.
7. We will have a pull back, even in a bull market.
8. All things considered, I won't play long due to the risks, but I will play short in this environment.

Wait

I'm glad I sold SSO, SSRI and calls last Friday. I kept only URZ, which did great today, up 18% to 3.2. Market was flat today, with Dow up 100, then down 100, and closed up 40 points. S&P was down a fraction.

1. Uranium is really a long term play. Sure URZ can go down to 2.5 again, maybe below 2. But long term, as long as there is no fraud, I see it touches 10 within 2 to 3 years. So I think it came down from 7.5 early this year to 2.5 last Thursday, due to speculative money out of it, is a great buying opportunity. But I'll keep adding to it if the price move below 3. This is mainly an investment, not a trade.
2. For general market, I'll wait it out this time, until I can decide which way to go. Short or long.
3. Today the 3 months treasury yield tumbled to 2.95%, that's 18% drop, and the biggest rally in 3 months treasury since Oct. 1987!
4. Yes, flight to safety is one the of reason. But that's still can't explain why a huge drop like this.
5. Either traders are expecting a Fed rate cut very soon, like tomorrow or this week; or traders are forcing the Fed to cut rate.
6. There is a third possibility, we have something big coming, maybe something bad.
7. VIX was down more than 12% to 26.33. So people are expecting a little stable trading ahead. But 26.33 is still very high in the last 4 years. So we may not get some extreme trading activity like last week, the market will likely to have 100 up and down in Dow on the same day this week, like today.
8. Many people argued we should buy when VIX is high. This is a very smart move in normal environment, but we're not in this environment. I think it's a good idea to sit mostly in cash and see how the market goes.
9. I will probably short if the market rallies too fast and hit key resistance area. The first one is at 1460, and next one 1490.
10. I probably will long if the market test recent lows this week or next. 1400 and 1370 are two support lines.
11. Both cases, it's a trade, not an investment.

Tough to be a trader

Today the "Bernanke put" puts the death to the put options holders, knowing they'd bank big profits on the option expiration day. Fed's surprise rate cut on an option expiration day before market open, was to create the maximum punishment for the bears! Some of these traders had lost lot of money this year, fighting the unreal bull marching and credit issue, and they decided to bet big on put options, they got killed today. Remembered, the future was down 1% before Fed's announcement, and after that it's up 1.5%!

1. I have no problem with Fed added liquidity to the market, bailed out the big banks, but I think it's unfair to announce it on option expiration day before market open. Bernanke knows the market well to time this on the 11th hour to hurt the short seller!
2. They can do this after market close on Wednesday, we had bleeding that day. They can do that after Friday's market close. But they chose to do it before today's market open!
3. I'm sure some bears got heart attack today!
4. It's really tough to be a trader, you know nothing about these plots, you research economic news, read charts, and yet you're playing unfair game with the big boys.
5. Fed always bailed out wall street when they screwed up big time!
6. And it told me to always keep the risks small, otherwise, you'll put yourself on great danger to be wiped out.
7. I'm sure many people who switched to short big time yesterday afternoon, they got killed today.
8. I was right to add longs yesterday on the panic sell off.
9. And today after the open, I thought I'd watch to see how high they could take it, not much! As a matter of fact, it sold off after the initial blast!
10. As a result, I found lot of stocks opened higher and closed much lower, not even kept par with the market, such as SSRI and other precious metal stocks.
11. And several other stocks, like HD, GS, all ended weaker than they should. So I don't think the market is out of wood now.
12. Therefore, just before the market close, I sold SSO, SSRI, DIA and QQQQ calls. I kept URZ since it's been trashed hard, I don't think it can fall further. I'll keep some to remind me to pick it up for the long term later.
13. Yes, it's very likely we'll have another up day on Monday and next week, but I rather be on cash and decide next Monday.
14. Things can happen this weekend, and if Fed had to create a perfect storm for the bears, to warn them not to short the market any more, maybe something really bad has occurred, that we don't know.
15. And Japan's stock dropped 5% on Friday, so thing doesn't look good. We may indeed have a black Monday coming. And Fed certainly put that to rest.

Next week:

1. I think it's likely we'll head higher if there are nothing bad happened this weekend, and probably push the market higher early next week.
2. I put the up target as 13500 for Dow and 1470-1480 for S&P 500.
3. I don't think Dow can pass 13500 and S&P can pass 1490. After that, it's very likely we'll have a test of lows.
4. So I'll wait on the sideline for next chance. Maybe long, maybe short. But I'll enter at a safe and "discount" price to cut my risks.
5. I don't share the view the crisis is resolved by Bernanke's smart move today. It's not that easy.
6. If market is too oversold, like yesterday's low, go long. Now S&P is 75 points off yesterday's low!
7. I won't be surprised to see the market open higher and end lower on Monday.
8. Like I said, it's tough to be a trader.
9. And long term, gold and precious metals should do well if Fed keep adding liquidity into the system. But if the market tank, PM will tank with the market. So you can buy them at much lower price.

Panic sell off

This is the panic sell off I was looking for. After two more than 1% drop the previous days, we had, during the low of the day, Dow, Nasdaq and S&P down 2.7%, 3% and 2.6%, lot of strong stocks were trashed as bad as good stocks, and yet financial stocks like GS, BSC all recovered strongly mid-day. This is a clear sign of short term bottom.

1. S&P managed to closed in green today, thanks to beaten down financials. Dow down a fraction. Let's see if we can have a follow through tomorrow and next week.
2. Tomorrow is option expiration day, and we had 4 previous Friday's sold off late afternoon. So if tomorrow we reverse the trend, then it's a short term bottom.
3. On the other hand, if we sell off again after 3PM, then I'm really not sure where this market is heading.
4. From TA perspective, today is a classic V shape panic bottom. And we headed lower yet again after 3PM, only to be bought again.
5. Short term, I expect S&P to bounce, the target is around 1440-1460. I don't expect it to go above 1460. But let's see if we can get there before we're talking about a bounce.
6. If we sell off again tomorrow, all bets are off.
7. Normally, we should have at least a strong opening tomorrow. Maybe can hold into the close.
8. I added long positions today. SSO, URZ, SSRI, DIA calls and QQQQ calls.
9. SSO and calls are playing for the short term bounce.
10. URZ and SSRI are also for short term bounce, but if there is none, these two are great long term stocks to hold. I will not be surprised to see them double or triple in the next 12-18 months.
11. Because Fed added liquidity to the system, it will add inflation pressure, and good for gold and commodity in the long run.

Ugly market

Oversold market sold off again today. Now it's really an ugly market. It's very difficult to trade.

1. On one hand, all indicators say we're due for a vicious bounce. Shorts will cover on the next big bounce.
2. On the other hand, we have this credit crunch issue, another shoe will drop at any minute.
3. A black Monday kind of event can't be rule out.
4. I sold my DIA puts early for a small profit. I thought I was lucky to see it dropped way below my price when market bounced early, in the end, if I hold on to it, I could make a huge profit!
5. Now I won't chase the short/put, I need to see a bounce before I jump in.
6. I won't chase long/call either, I need to see another panic sell off before I join.
7. Last few days, sell in the afternoon is a sure bet. But this can change at any minute!
8. Yes, I will miss lot of chances, but now it's a very tough time to make money. Cash is a great position to have if you're not sure.
9. If people are worried about the credit issues, we probably will sell off into Friday's close.
10. But since many people are talking about Black Monday, we probably won't get it.

Broken down

Unless we rally big from here, this market is broken down. Dow, Nasdaq and S&P all made new lower lows today, only Russell 2000 closed above August 6 intra-day low. If the credit crunch is even spreading into the money market fund(Sentinel Management), and Wednesday marks the last day for many hedge fund investors to submit redemption requests for the third quarter, we may head into another down day tomorrow.

1. If we have a follow through on the down side tomorrow, then I see another big leg down in the market. S&P 1370 area is the target I think will be reached soon.
2. Normally, this market should make a low early tomorrow and head to a higher close. But if it doesn't close higher tomorrow, watch out below.
3. The market is oversold yet again, and VIX is so high that you think it marked a bottom, and ISEE is below or around 100 for more than one week, all these are indicators for a major bottom.
4. Yet, today we had a very orderly decline, each small rallies were sold, and we moved lower in an orderly way, there is no panic selling; VIX didn't jump as it used to do during other sell off recently.
5. This tells me something big is coming, very likely a big sell off that tops all previous decline this year, and this panic sell off will likely to mark a short term bottom.
6. If we don't have any panic sell off soon, then we'll likely head much lower, slowly. It's even worse than quick panic sell off.
7. Either way, now is time to sell on any rally, and don't buy on the dips.
8. Now is an expensive time to make money on the long side, you need to wait until the bottom is in.
9. Tomorrow is a key day, and then next Monday, which gets the option expiration out of the way.
10. But at time like this, don't try to play the option "strike price game", it won't matter, this market can go up 100 points and then down 100 points the next hour.
11. I purchased some DIA puts today, hoping the Dow will join the sharp decline in Russell 2000 soon.
12. We'll likely dip below 13000 very soon, maybe tomorrow, how low it will go, I don't know. But I think 12500 is a target if we have some panic selling.
13. Cash is a position to hold now.
14. And if you're nimble enough, buy some puts or ultrashort ETFs.
15. BTW, during 1987 crash, the market had three big down days before The Black Monday-Oct.19th,1987. So even the chance this happens again is remote, you'd better prepare for it. Don't get caught in something like that.

Week 8/13

Even though we had credit crunch cross the global, all three major indices in US managed gain for last week. And VIX hit yet another new highs in 4 year. I don't see this market can rally out of this on central bank's injection of liquidity.

1. Do you think we can rally from here? With unsolved the subprime issue, and CDO issue, which no one knows how bad things really are, that's the uncertainty market hates.
2. And we're in a seasonal weak market months, September and October are two of the worst months in a year for the market.
3. And Fed and ECB both contradicted what they said for interest rate (hiking, fight inflation) and what they did (injected liquidity into markets by more than 200B in two days!).
4. Fed even used public money to buy risky mortgage CDO to show their confidence. Wow, who can say the real economic issues like these can be solved by Fed?
5. I see more vicious cycle of up and downs ahead next week, with option expiration week, the VIX will rise again before it moves down.
6. Unless we have a black Monday kind of events, otherwise, I don't see how we can resume rally. We need a fresh start, and only a correction can resolve this, it takes time and some serious unwinding of risky investments.
7. The way VIX spiked each of the last four weeks, tells me people are preparing for black Monday, they don't want to get caught in an event like that.
8. The aversion to risk will further put weight on credit crunch, since all banks(which has bad loans of their own) will add their own liquidity (cash) by holding it, they're afraid of let the cash back into the market without know if they can get them back or not.
9. As a trader, you rather miss chance than get caught in losses again.
10. Therefore, I think the safest way is to play the short side on a very strong rally. And only play long when the crash has happened.

Back to neutral

Today Dow and S&P down almost 3%, it took 3 days to gain more than 50% of recent losses, and it took one day to give back 50% of that gain. To say the market is volatile is an understatement. I used my indicators well, sold all my calls and SSO and UWM yesterday (not close to peak, BTW), but it's very good to see that I avoid another disaster if I still hold them today!

1. The market did exactly what I expected yesterday, turned lower in a hurry. I thought bulls could fight another day, but I overestimated their ability.
2. And I positioned myself right, with some IWM puts. Since I was wrong with recent SPY calls purchases (bought too early, and only yesterday it's profitable, and I sold for a huge loss last week), I only added small IWM puts yesterday.
3. Today I bought IWM 79 Aug put at 1.48 when market had a decent bounce off low early this morning, later I sold at 2.2.
4. This is not the best play, I should buy QQQQ or SPY puts, since today, I noticed the beaten down sectors and indices like Russell 2000, were the strongest. Like home builders. So it pays to pay attention to the market movements among different sectors, and pick the correct one to trade.
5. I knew the market would tank later into the close, but recently I was early to buy calls, I didn't want to be too early to buy puts either, I really wanted to see a bigger bounce into the afternoon so I could add more puts, turned out to be wrong.
6. The bulls never put up a strong fight after the initial strong bounce, it's down from there into the close. And the last 30 minutes program buying didn't show up either.
7. I also sold the IWM Aug puts I bought yesterday, at 1.5. I bought at 0.83. And the close is 1.73.
8. Now I'm back to neutral, all in cash.
9. VIX shot up 23% to 26.48, the highest level yet again in last 4 years!
10. I think the VIX option play is not a bad idea at this stage, but be prepared to lose them all if you pick the wrong bet.

Next:

1. The market can go either way from here, with VIX high, a big bounce or a sharp sell off will be next.
2. Since some of my indicators point to selloff, some points out to a bounce, I moved into cash. I'll let market tells me what's next.
3. It's very tempting to buy another sharp drop tomorrow morning and sell later.
4. It's also very tempting to short another big bounce tomorrow.
5. With a market like this, you may get the chance to do both tomorrow, for a good profit.
6. But if you're wrong, then result will be a disaster.
7. I will only do this if there is at least more than 1% move, to fade that move.
8. And I think tomorrow the market will sell off early in the morning, then bounce back, and then sell off again into close.
9. I rather to miss the chance to trade than being caught on the wrong side again.
10. No action is better than wrong action.
11. I think we'll have a decent chance to have a 10-15% correction this time, now we're half way there.

Shifting back to bearish view

Last three days, the market touched new low, and rallied sharply. S&P touched 1427 on Monday, and closed today at 1497. The recent high is 1555, what correction and turmoil we're talking about? Looks like all are well in wall street.

1. I didn't follow my own advice to buy the dip on Monday and Tuesday, because I had IWM calls and SSO and UWM, I needed lot of nerve to just hold them through Monday's low, and again the 15 minutes dive after Fed yesterday.
2. I put myself at a very difficult position, since I entered calls and ultra ETFs too early.
3. Today I sold all IWM calls and SSO and UWM. The two ETFs are profitable, but the IWM, I think it's about even. Plus I sold my SPY calls at huge losses last week, if I hold to sell today, I can make money!
4. But I was lucky to sell my IWM Aug 79 call at 1.71 and 1.57 today, on Monday, you can buy it at 0.3, and you can buy it at 0.4 yesterday! I had enough nerve to hold them through these moments, not too bad.
5. If I waited, then I could not buy them early and could buy them last Friday and again this Monday. Entry is very important.
6. Since it took market 2 weeks and tons of bad news to correct 8% in S&P from 1555 to 1427, and it only took it 3 days to erase more than half of the losses, I switch to bearish view.
7. And I bought very small IWM puts today, when the market dived after 3PM, it's a 50% gainer, but I didn't sell. Last 20 minutes the Dow closed up 150 points! Can you say manipulation?
8. We had this late buying last week on Wednesday and Thursday, to only crash to new low on Friday and again on Monday.
9. I'll wait to add ultra short ETFs and puts if the market continue its V shape surge.
10. Usually, the down side is faster than the upside, and that's the sign of bull market.
11. Now the opposite is true. And if a rumor (GS's fund is in trouble) can move the Dow from up 180 to down 20 points within 30 minutes, that doesn't seem strong to me. Yes Dow recovered all and spring to close up 150 at the end.
12. I think it's a trader's market again, it can go up and down 100 points on Dow on any day. So pick your spot carefully and take profit if you have one.
13. This is the lesson I learned!

Next:

1. I don't know how high this market can go, but I'll use the opportunity to add shorts again.
2. Even the market is to resume the up trend, the low of 1450-1460 area is very likely to be tested, and even 1430 area can be retested before it can go any higher.
3. So I expect the above case to be played out near term, likely before Aug.17th, which is option expiration week.
4. But now the market is so strange and volatile, if you don't have enough nerve, you better sit on cash and watch, you can get burned easily!

Week 8/6/07-8/10/07

This was another bloody week on wall street, specially on Friday. S&P500, Russell 2000 and Nasdaq all hit lower lows, only Dow was a little higher than the recent low. An early call for bounce was bad call and cost me lot of money. This again tells me patience is needed in time of crisis like this, you can find better price later by just waiting!

1. The recent "buy on dip" is not working any more, which is the case since 2006.
2. The magnitude and the speed of this sell off surprises most of us.
3. There are two possibilities here:
4. Another sell off to 400MA in S&P500, which brings us to 1360 or lower, a black Monday, so to speak.
5. Or a bounce that brings us back to 1490-1500 area.
6. I think we'll have a bounce, and may not reach 1490.
7. Considering the oversold conditions and the credit news all over the places these days, it's likely the bottom is in or very near.
8. A sell off on Monday and Tuesday morning should be another opportunity to add, if you think this is not the beginning of the bear market.
9. We'll have a relieve rally after Fed meeting. How strong or weak of the rally, and, how long it lasts is any one's guess.
10. VIX is at new high again, closed above 25!
11. ISEE had three days below 100 recently. Again argues for a bottom here.
12. Above are two charts of SPY, you can find your own conclusion.

Short term bottom

Two days in a row, the "computer program" kicked in to buy in the last hour. I have to say something is going on. And that paints a good tape to traders.

1. It's very likely the market will test 1490-1510 area soon.
2. But if we have other "big news" to drop, watch out below.
3. This is a short term bottom, we may rally into and after next week's Fed meeting.
4. Now it's good time to be in long position, but no options, it's just too risky.
5. VIX is still over 20, so the market still has the potential to make a turn, but if VIX continue to drift lower, good for stocks to rally.
6. ISEE is under 100 again, also an indication of short term bottom.
7. Let's see if we have a follow through tomorrow. Now I'm net long with SSO, UWM and IWM calls.

Be cool

The market was volatile today, up and down, several times over, and S&P made a 26 swing in the last 35 minutes, just like last Friday it dropped 20 points in the last 30 minutes.

1. I had to liquidate positions today, and I didn't sell at bottom, and it's not top either.
2. I missed yesterday's golden chance to unload my calls, since I thought I got the rally going for me. I'm still not careful enough.
3. Now is time to continue to unload these calls, even with losses.
4. SSO and UWM, can hold a little longer, but options, I don't think I can hold them over the weekend.
5. Be cool.
6. So far this year, it's an expensive learning experience for me!
7. I have to fight another day.

The market:

1. VIX hit new high again today.
2. Just like yesterday was very bearish in actions, today was very bullish, the indices closed higher after touching new lows!
3. Maybe the PPT was taking actions. By the number, you have to think it's not traders doing the work, it's like a computer program at work.
4. Let's see if this indeed is the bottom, we need tomorrow and Friday to close higher than today, we need follow through.
5. After the bounce (to 1490-1510), it probably will go down again.