Midday Apr 14

10:30 a.m Too busy yesterday to trade or post. For today, we covered a portion of the precious metal shorts. A short term bounce has materialized in the precious metals as expected. We also covered our SDS short from friday AH today for a small 2% profit. We waited to see if 20Hour MA would give way. Instead it gave us a long tailed candle. We need to see a reaffirmation" of a sell signal on the 10 min to reload shorts. But we still think we are quite close timewise to a nice 10% or more correction.

12:00 Noon: Waiting for 20H to break with confirmation and bear flags to short.

12:30 Shorted heavily at break of 20H, covered some at SPY 840. Letting the rest ride. Looks like all the bears were waiting for that break too. The down move was swift, surgical and massive volumewise. We expect more downside. The target remains the 760 region which we have long touted.

1:30 Seeing an anaemic updraft. Looks like another shorting opportunity. The entry point would be to watch the 5 (10m) moving average cross under the 20 (10m) moving average. That would lead to a strong downdraft. Until then we shall wait.

1:40 The market is forming a bear flag on the 50 MA (30m). Exactly where we covered a portion of our leveraged short ETF. We may be setting for another downleg as soon as this 50MA on the 30 m breaks. 

2:15 P.M Superb little market tutorial in progress here. We are quite sure a lot of amateurs would have shorted when the market hit the descending 20MA(5 min). The market then headfaked a small down move and then if & when the price cuts above the 20MA(5min) one can expect a surge of green. We ideally want the 5MA (5min) to make a bear CROSSING of the 20MA(5 min). If you had shorted, you would be shorting into a double bottom. Trading is a lot about of patience and knowing when not to trade.

2:30 As noted, follow through on a classic intra day double bottom. Strong rally is ensuing. 200MA (5 min) ~85 SPY is the first region of resistance. We will wait for crossover mechanism to guarantee a shorting opportunity. Until then we wait.

2:45 smells like short term consolidation for one more small intra day push up. Staying clear , waiting for a short.

2:53 If we get the bearish 5MA, 20MA (5min) crossover, we would short with a stop above the 20MA.

2:59 The crossover signal has not yet triggered, the bulls saved the line. So we stand aside watching for the moment. Lots of chop here, which further confirms that this is a counter trend minute wave. BTW, quite enjoying day trading today, it has been a long time since we day traded and tape watched. Love the chop, so many moving averages, so many trendlines. Timing and nimbleness is the key. 

3.01 classic bread n butter WV pattern, right at the bottom of a chart. All the 5 min moving averages have played as they should. Absolutely terrific technical action here. Remember our crossover mechanism never triggered and our stand to wait and observe is vindicated again.

3.20 Break out to the upside of 50MA(5 min) should see some more green volume.

3.25 Leaving for the day, had some decent profits in the afternoon on the SPY down move. Still hold 20% of the short position. We expect much lower prices over next week or so.