Fri May 15

12.00 P.M Added a small portion of TSO long. Covered a portion of SPY sliver (from 90) at 88.8

2:20 P.M Since this market volume/breadth/$CPC etc are not confirming the plunge. There is a risk of a sharp rise in the next few days/weeks now. We would not want to short anything until 875 is taken out. On a technical note, the obvious target on the upside is 200d SPY. It is entirely possible that the big program trading and hedgie shorts are waiting for a tag. And since 200d is an "easy target" to start shorting. It may very well happen that the market rally a nice 5-7% above the 200d to put off rookies.

Sentimentwise (at the risk of everyone being a successful contrarian :-)), has we seen major jubiliation no! Remember this downturn started with bad news (of retail spend down). Rallies don't end on bad news. They end on good ones. We are weary because we expected a much more vicious downside thrust. Alas it seems to be missing.

We need to scan the charts to see if there any trade setups on the long side. We will report back later in the day.

6.00 P.M We could find very few convincing charts for long setups. TSO was a half baked one, so we put on a small long position. A break above 18.5 on TSO would give a massive thrust to 25, the stop is a close below the moving averages.
That being said, the market volume was low, the breadth sucked and we bounced again off the 20d ma. We don't feel like going aggressively short here. Ofcourse our sliver SPY short positions keeps us in the game. We covered some today at 88.8. We will add if the market rallies to 900. We will unload some SPY shorts at the 50d if the 20d breaks. In terms of weekly charts, most indices and SPDRs had an inside week, something to keep in mind.

We prefer to stay safe here.