We are only 90 minutes into the trading day, and what a breath of fresh air it has been. Best day I’ve had in literally weeks. We can see here how the /ES reached escape velocity over its lifetime resistance line and then failed.
If you look at a longer-term horizon, you can see that, broken line be damned, we are at an extraordinarily powerful point of resistance (or decision, if you prefer). This is the “Face-Off” point I’ve been mentioning repeatedly, and is a crucial fork in the road.
Small caps have been especially weak today. As I am typing these words, the /RTY is down 1.7% (versus the /NQ which is literally unchanged). Unlike yesterday, I’m not going to do a snarky post (see red highlight below) to demark the exact bottom of the day. No thanks. I get no pleasure looking like an unlubricated vibrator whose batteries have died. I’ll just let it ride and keep my fat mouth shut.
Vastly more important than any of this, for me, has been energy stocks. Yesterday, I trimmed a couple of those positions (not because they were bad charts, but because the losses were nauseating to me, and I have a tender tummy) but I amplified the surviving positions. It’s heartening to see that our friends at OPEC had one day of glory, but that energy stocks are getting their oily butts kicked for the moment.
Here’s my present positioning:
- 23 bearish equity positions (I am tending to get September puts, as opposed to June, these days) with an average days until expiration of 125 days;
- 2 bearish ETF positions
- Down to 9% cash
