If you sold this 40 cent rally, right now you have a 5 to 6 cent profit. That’s only 250 to 300 bucks a contract.
However, make sure you manage the position so that this does not become a losing trade ever. Take some profits or lower you stop so that worse case its a push.
In SX we challenged the 1309 level an broke down to 1283. That’s a decent 20 cent break. I’d be a scale in seller at 1311 to 1321 Look for those levels to give decent scalping opportunities in a volatile market.
The WZ=CZ spread has bounced back to 174 from yesterday’s 168. If you stepped in and bought any, I’d watch that spread closely. It can move pretty fast in your face, but I definitely got over sold to fast, which is why I suggested scale in buying between 170 and 165. Its a dicey, risky, fast moving spread, so you have to watch it carefully.
As for the short Dow position: I had my first warning shot that we might be over sold. Yesterday on the cable show I saw a headline to the effect of “Dow bull looks for a 30 % correction”… I didn’t pay any attention. I don’t know who they are talking about. I didn’t look to see if he was talking 30% more, starting from yesterday’s level. I doubt if they noted that its already had an 1.8% pull back from its high.
When the media starts touting a position, 9 times out of 10 its a fade.
I’d lower my buy stops to protect my profits on the shorts.
Finally, the long position in August Gold. We’ve come back to 1377. I’d look at 1384 to 1399 to take profits from the recent buys against 1350-1355.
CER