S&P500 – The week starts with a Bang


European markets are set to open -4%, while Wallstreet (futures) will likely open -1.6%, click here for an overview. Click here for the latest update on the capital controls of Greece.

When I came home late Saturday, I did not know about Friday’s action and the Greece saga of Saturday. So at first I was disappointed to see the longs stopped out (stoploss 2098, still a decent profit: EUR 1520 profit) as I was expecting more upside, short term.

But then I read my usual financial pages and that feeling changed instantly, as you might understand. A drop of 1.6% for the S&P500 would bring it to 2070, equal to the neckline of the SHS pattern, click here. If it closes below 2070, the SHS target is activated and more downside is to be expected.

My current positions are: 1 short SPX @ 2117 and 1 long VXX @ 18.26. The short SPX has a stoploss of 2117 and a trailing stop of 3%, so the worst scenario that can happen is that this position will be stopped out at Break Even. The long VXX has a stoploss of 17.9 and a trailing stop of 5%.

Click here for all Open Trades, VIX here  or the Crude Oil WTI chart and strategy. The SPX:VIX will likely produce a medium term sell signal tomorrow (assuming markets do not recover overnight). The last 8 (!) times this indicator changed to sell, it led to 8 (!) times a corrective wave of at least 5%. So be careful if you want to catch a falling knife.

A final note. I have to say, I feel bad for the Greek people, especially the ones that did contribute to the development of the country. Now, their country will be robbed and left to pieces. Unbelievable what humans can do to each other. Apparently, just as in trading, it’s impossible for us all to win, right?

 

 

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