Wednesday, August 13, 2008

Taking Profits Here

I may be completely wrong - probably will be - but I took my gains on the shorts I had today along with a few daytrades in PDO and WB. I am back to 100% cash. I will have the % gains up later today. Why would I do this? I am looking at the S&P and Dow right at their uptrend lines and the selling today has come on low volume. The number of stocks over 50% in a month has dropped big-time today (down to a little under 40 compared to over 100 the past two days). With options expiration this week, I just sense something fishy will happen the next few days. These weeks are rarely a one-way path down or up - they are usually more like a roller-coaster. I still don't know that this is a market to stick around in for long periods of time. Perhaps I've just been burned too much by whipsaws the past few weeks. Either way, my account is up 7% over the last three days and is close to highs for the year, so I am taking those gains here.

Dow and S&P 500
Chart from Telechart2007, Courtesy of Worden Brothers, Inc.

That being said, if we close below the 1275 area on the S&P 500, and the 11,460 area on the Dow, then I will probably reenter some of these shorts at the end of the day. For me, it is just a trust issue right now with this market - I don't trust it as far as I can throw it. It should be an interesting afternoon - this is a crucial point for bulls to defend their turf. Best of luck.

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