As noted in the trade log, I not only held my short positions on SPX and SOX despite yesterday’s climb above resistance the SMA 50, I also added a short against the small caps. This is not normally the way to make money in the bubbly stock market, but there it is anyway.
I just have a nagging feeling that a bull trap may be in play. I do not envision holding short if SPX makes a higher high to Tuesday’s high, but on the possibility that this week’s pop might prove to be a bull trap, I’ll hang on as long as the index does not make a new high for the week. I’ve drawn in point ‘C’ as a projection to what I’m currently thinking may be the market’s course over the coming few weeks.
An A-B-C bull market correction. We shall see about that. But I wanted to put up a picture of this potential course.
