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[denleo]

The market bounced, which was natural. The bounce was not that impressive if we take the breadth and the muted action by small caps under consideration. Having said that, I wasn’t too impressed by the downside action in the beginning of the week either. The strategy is to keep selling bounces; whether it is for a point on the spooz as a scalp or for a multiple day swing trade. I believe that is where the money is for a market timer in the near future. SPX hasn’t traded below its 20-day moving average in nearly two months. We are due. As I said, the funds are looking for an excuse to sell the market; I’m sure they will find it.

No changes to the portfolio.

Open Positions:

Long SPY / Short QQQ from the ratio of 2.107
Stop at the ratio of 2.03

Long XLNX / Short KLAC from the ratio of 0.653
Stop at the ratio of 0.624

Short MAR from 65.53
Short LUV from 26.88
Short IFF from 105.35
Short XLK from 38.97

Long SPX July 1925 / 1975 Put spread from 16.70

Long RTN / Short LMT from the ratio of 0.587
Stop at the ratio of 0.559

Long MDY / Short CNW from the ratio of 5.168
Stop at the ratio of 4.80

Long PAY July 33 Calls from 4.00

Long VIX October 20 Calls from 1.60

Day Trading:

Morning strength should be sold, but morning weakness should be untouched. I will not be surprised if I don’t find a good set up tomorrow. Tech sector is very vulnerable. I will pay more attention to tech stocks in case I find a sell set up. As you may have noticed, I’m operating in a bearish mode now.

Have a Profitable Day!