The best part of a short term rally is the thought of selling positions into another bear cycle.
Many trendlines were broken on Friday, some cascading occurred, but the 5min bars were fairly orderly. It was quite a thin buying market at times, some mid-day buys were easily able to push the market higher, showing bull weakness by the day's end.
Sometimes these sharp down days are the best contrarian play. Find a bullish credit spread you think has been grossly overvalued, and take it. The market has been wounded, but it tends to retest the mean before purging occurs.
I see /ESH0 around 1125 as a nice swing high, if a bear takes form. If we touch & go around 1105, then 1040-1050 is a good place for a bullish stand. There are too many fibs and lines crossing in that area not to pose resistance.
Given the news perking up to the market movement, grinding around 1090-1120 would probably be most suitable to infuriating both bulls and bears. Got theta?
What goes down, must come UUP, right? Is it possible a dollar carry trade with equities has fueled part of this rally? Did Goldmine Sachs receive a margin call from Uncle Sam? The tape tells me exactly what I would like to hear. ;-)
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