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Trade 07/20/2011

Today, based on the market’s movement, I am even more convinced that this market is poised for decline. It may not happen, however, but at this point I think it will. It still may be bouncing a bit at the resistance level, or even go up a bit, but that will provide better position to open bearish positions at better price.

Change The Way You Trade Forever

Therefore I decided to open more bearish positions on SPY and QQQ by buying some puts:

1 SPY Sep’11 134 Put and 1 QQQ Sept’11 62 put.

However I needed to sell some of my open positions and I decided to sell my losing long term dividend positions on CTL and HGIC. If the overall market will fail, these stocks will most likely go even lower than they are right now. I do not want to have losing positions, but I am planning on buying them back at lower price later.

All the trades should occur tomorrow morning or during the day. On buying the puts I have limit price so they may not execute right away. I’ll see later during the day or the week. If it won’t fill by Friday I will re-evaluate.

Right now, the market is bouncing and if it will have enough strength to create a new higher high, it will be a sign that the market is ready for a new bullish trend, but I am not convinced that this is the case and I believe it will actually create lower high and turns back down. That would push us on downtrend path and we may see 126-ish levels on SPY and 53-ish level on QQQ.

Happy trading.

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