Thursday, October 21, 2010

Staying short...

Current market status:  Healthy
Latest signal:  Sell/Short (generated 10/20/10)

The reversals gave my system fits and had it flipping between buy and sell most of the day.  But when the dust settled, it remained short going into Friday.   If we see early strength back up toward 1190, I will add more shorts.  Otherwise, I'm content with my current position size heading into the weekend. 

Another interesting thing to point out... Hitting a new nominal high Thursday in the SPX resulted in us being a good chunk closer to flipping to an unhealthy market.  That sounds counter-intuitive, I know.  Regardless, I was happy to see the new high (even though I was short).  Gains come much faster in an unhealthy market when you're short vs. having a long bias in a healthy market that usually slowly melts up.  Imagine being short for the flash crash May 6.   The system flipped to unhealthy on Apr 27th and was mostly short. There were some good long trades as well.

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