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[Jhoe]

For anyone who was bullish in mid-late June, and "cautiously optimistic" that a rally of some sort was long overdue, we've been scratching our heads lately, especially yesterday, as the indices surged past even our wildest expectations in a short period of time. For example, I posted several times about my long position in July IWM calls from a few weeks ago, bought around IWM 78 and change. I started lightening up on those late last week as the IWM got above 84, sold the rest unfortunately on Wednesday this week around 84.50, just before we surged to nearly 86 yesterday. So why is todays' NFP sweet justice? Well, for the reasons I just described. Yesterday it felt like I left some huge gains on the table, and although nobody ever lost $$ taking a profit, especially after one of the fastest 100 spx points up I can ever remember, it still isnt a good feeling to watch a rally surge beyond your target(s). In particular, the IV surged yesterday in out of the money index calls, which was where I was positioned, meaning many index/index etf calls at the money or out of the money doubled/tripled in 24 hours. For an options trader, thats a lot of $$ left on the table. The bottom line is nothings really changed in the last month. I'm a technical trader, I ignore the "noise" of day to day economic data, and instead look for technical opportunities that result from the over-reactions of the day to day skew. While the spx can technically get to 1380-1400 this summer, based on a bullish butterfly pattern I posted about several weeks ago, the pattern took 2 months + to form, and typically takes roughly the same period of time to complete. So even based on that technical setup, this recent move was absurdly overdone, given the short period of time it occurred within. So, to the bulls who have sold on the way up, enjoy sweet justice today,you're not crazy, the smart move was to lighten up into this rally. Maybe we go higher after this lower open, maybe not, the only CERTAINTY was that the smart move for the June bull was to sell into this July rally...for now. g/l to all