I'm glad that I'm back to a nearly fully-short position, because today marks the fifth day that we've seen heavy distribution in the past month. I'm looking for a sharp breakdown any day now, and I think those who are waiting for 1100+ will be left in the dust.
I think it would be too obvious if the mkt rallied at this point. The fact that I switched to bullish after a 60% rally tells me that I'm being the sucker. I don't want to be less than 90% short, and will add more if the market rallies higher.
I am net short as I've been for the entire rally. However, today, I closed out 25% of my position at SPX 1050, as I am not expecting a rally back to new highs above 1080 to finish out this rally.
Notice that there is strong trendline resistance at /ES 1130. I will reenter into my full position in the 1080-1130 range. Notice the MACD divergence is portending a strong decline coming up, so I'm just closing out part of my short position, instead of the whole thing.
I like this chart the best. Notice that we need one more up wave to finish wave-c. Wave-ii of Wave-c was a normal 3-wave zig-zag. Wave-iv of Wave-c looks like it's an irregular flat where both longs and shorts get whipsawed--first with the fed spike yesterday, and then with the plunge this morning. This is one of my favorite patterns; I haven't seen one formed like this in months, so I'm happy to make a bet on this one.
Good luck to all!