This market is mortally wounded. Frankly I'm somewhat surprised we got hammered the way we did on Friday. Obviously, I had been anticipating a more extended bounce. It may still play out that way but, on the other hand, if we take out 12,500 on the DOW it's incredibly ominous.
Speaking of Friday, mine sucked. We dropped 246 pts on the DOW and I was flat on the day. Awful. I have consistently made money on these big downdrafts and feel as if I missed out. To be honest, I have to admit to losing focus last week. Wednesday afternoon I was up 3% for the day when we rallied hard off the 12,500 level -completely erasing those gains. Anticipating follow through on the bounce I took down a lot of my short exposure. For the rest of the week I basically sat on the sidelines instead of putting my cash to work.
Too much defense being played on my part. Time to be a man and claim my stake.
Going forward, we are heading into earnings season. Next week we have economic news in the form of CPI, PPI and jobless claims. A handful of financials report, including C, JPM, MER and WM among others. I'll be watching for IBM, a name I'm currently short, to report on Thursday.
The watchlist is ripe with (primarily short) candidates. As I went through the list this weekend the opportunities were just jumping off the page at me. I expect the upcoming week to be a good one. I'm a terrible trader really but my substantial predictive powers seem to be at their peak.
If I had to guess, I'd say we bounce higher early next week. Should that be a poor guess I will look to get aggressively short on a break of the lows. Hoping for a bounce that sets up the shorting opportunity of a lifetime. Could happen or could just be wishful thinking but I'm relatively certain of the end game.
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