Futures are gapping up a decent amount almost 1% due to good news on China exports still staying strong and that they have not slowed due to european debt crisis. The trading handbook would have said that we gap down today with yesterdays nasty reversal and finishing in the red yet here we are gapping up 1%. Unbelieavable the rules have changed. In 10 years I have never seen this type of funny business. the Dotcom crash was a powerful and swift kick in the arse but at least there was a trend to trade. Same thing in 2008 there was a trend and then when things got sooo oversold you switch to the longside and play bull for 2-3 days then go back shorting. this market is much more peculiar as the intraday swings go from Green to red and back to green etc.
This is not a swingtraders market or a momo/trend traders market. right now only mean reversion type strategies work. Meaning that the rallies get faded and the weakness gets bought into a certain type of equillibrium.
main thing Im looking for is how the market handles bad news. Once everyone knows that it cant get anyworse and the market digests it then we can have a bottom. At this point a break below 1040 spx seems imminent but when who knows.
50% cash position is a must…I use that cash for daytrades and scalps. but i got 1/2 size now and give them a longer leash to compensate for the whipsaws.
I will post charts intraday as I see them. Right now making extensive watchlists is pointless
Keep TZA and DRV in your backpocket as we will use them all day