Recap & stance: We got a weak sell-off in the markets today. There may be a short term bounce monday or tuesday but our turndate is around the 27th (+/-) and we will continue to be bearish into that time period. We did a quick & dirty calculation of targets based of fibonacci retracements (we will update it over the weekend, should we find errors). It looks like the 740 region will be the first stop.
From a psychological perspective, it is possible that we get a "deep" retracement into the 700-710 area, whereby some bears could be lured back in and subsequently trapped. Under our current count, we not like to see the market break 666. If it does, we will have to reevaluate our bullish stance. In any case, next week's waves are key to this puzzle.
The month of march (Spring equinox) is a very popular turn period for lots of markets around the world, for whatever reason. It looks like this year will no different. If you traded last year, March 17th was the bottom until Late May. We are expecting a similar rally this year too, and then it could be "Sell in may and go away, once again" - we'll see.
Rant (Ignore): I am sure there are lots of experienced seasonal traders out there. So, there is no reason for a trader not to add seasonality to one's arsenals of technical tools. Google search gives me http://www.spectrumcommodities.com/education/commodity/charts/index.html
It has some basic, but nice, seasonal charts to refer from time to time.
Positions & Trades: Lots of traders would have been eyeing XLE and its components today. This was one of the "easiest" trades in terms of risk reward without having to worry about waves, indicators and such. We made some $ on CVX puts as noted yesterday and cashed out at the end of the day. We believe CVX will head down to its 20MA (~63) sometime next week.
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