Covered Short

Covered SPY short at $136.70

New Trade Entry

Sell short SPY @137.13

Explanation of Trade Entry and Exit

Entered long trade for the following reasons:

1. 50% retracement of Fibonacci Fan from Friday's high to yesterday's open support line was hit.
2. 5-min %D Fast Stochastic (%K Interval: 30 periods, %D Interval: 6) for SPY = 10, which is very oversold short-term
3. 1-min SDS %D (short SPY ETF) Fast Stochastic (150,30) > 90 which was well above NYSE TRIN Index of approximately 75 at the same time. This is a bullish divergence, reflects the fact that selling of the market (advances/declines, weighted by respective volume)

Closed long trade for the following reason:

Targeted a quick 4 point move, expected a pullback, but the market has continued to surge higher...we hit a prior day support line which made me exit this trade prematurely, but it is a nice profit!

Sold SPY / Closed Position

Sold SPY position at $134.08, a .40 move or 4 point move in the S&P 500

New Trade

Went long SPY @$133.66

Explanation of Trade Entry and Close of Trade

Entered the short position for several reasons:

1. 15-min Accumulation/Distribution (A/D) Line: showed a bearish divergence -- higher closing price on SPY was NOT matched by a higher A/D Line value
2. 5-min chart, % D Fast Stochastic (% K Interval: 30, %D Interval: 6) hit a reading of 90, which is "overbought" short term
3. 5-min chart, % D Fast Stochastic for SPY > % D Fast Stochastic for IYT (Dow Transport ETF, a good leading indicator of market direction). This is a bearish divergence.
4. NYSE TRIN Index Stochastic > SDS (inverse bearish ETF on SPY). This is a bearish divergence for SPY.

Covered for the following reason:

1. As market traded off, TRIN Index Stochastic did not move with the sell off...that is a bullish divergence, short-term.
2. TRIN Index MACD Histogram readings continue to decline, which is bullish for SPY

Conclusion: Turned into a very short term, but easy, profitable trade...will never go broke taking a profit!

Covered Short (Closed Trade)

Just covered SPY @$134.15.

New Trade

First short, SPY @$134.37...half a position, may go higher but didn't want to miss out...

Explanation of Trade

As noted entered short trade at $132.99 for the following reasons:

1. Fibonacci Fan resistance level was hit
2. A/D (Accumulation Distribution) showed a bearish divergence => higher price high on SPY was met by a lower price high on the 15-min A/D line
3. Both SPY and IYT (Dow Transports): MACD Histogram was negative
4. TRIN (NYSE arms index) vs. SDS => TRIN Stochastics (short and long term) were both > than SDS counterparts, which is bearish for the stock market

Market is now trading at $132.57, so I covered early @ $132.72...just tough to stay short the market lately, so I'm a bit gun-shy, took the profits early and will watch for the next step.

TRADE ENDED

Covered short SPY @ $132.72

NEW TRADE

Shorted SPY @ $132.99

Explanation of Trade End

Booked a small profit, much less than hoped for. The market held in even as my indicators told me to turn bearish, which I did, but it took a bit too long for the market to start to break down, so I bailed out and covered a bit earlier than I would normally do. As it turned out the last 15 minutes or so added to the weakness, so more profit could have been made.

Trade Ended

Covered SPY trade @ $132.63

Explanation of Short SPY Trade

1. NYSE TRIN Index Stochastics > SDS Stochastics (bearish divergence)
2. SDS MACD has bottomed out, is increasing while price of SDS made a new low (SPY made a new high)
3. IYT (Dow Transports ETF) Stochastics < SPY Stochastics (bearish divergence)
4. IYT MACD and SPY MACD are declining while price of SPY made a new high
5. Money Flow Index > 80

New Trade

Shorted SPY @ $132.77

Chicago PMI and Conference Board survey both come in much weaker than expected, pushing markets lower...

"The Conference Board, a private research group, said its index of consumer confidence retreated to 61.1 this month from a revised 64.8 in December, first reported as 64.5. The January index was far less than the 68.0 expected by economists surveyed by Dow Jones Newswires" - WSJ

No trade entry just yet...