Well, I must admit that I was probably wrong in judging the market direction. I didn’t expect today’s move I rather saw the market bouncing around the same level or slipping down. However Greece issue (not sure how efficient the bailout will be) along with good earnings helped to move the market back up.

That means that the market is in bullish territory. However, it is not still decided where to go. These days it will either create a new higher high and then we will see a new bull trend, or tomorrow or next week it will fail, creates a new lower high and we will most likely head down.

Nevertheless I closed some of my losing positions today (sold some puts on SPY and XLF – apparently the financial sector is going to do well and looks like it will go bullish).

Those loses I suffered from these trades are quite significant to me, considering how small account I do have. Thus my next plan is to slow down a bit, recover the losses and buy back my dividend positions.

Recently the DOE managing the US Strategic Petroleum Reserve (SPR) claimed that they will not tap to strategic reserves again as they did a few weeks ago. When they put 60 billion barrels on the market oil price dropped very significantly. However after they announced that they wouldn’t do it anymore one would expect that the price would jump up. Instead, the price action was mediocre and I would expect USO bouncing of the resistance and going down to re-test its support level.

Will USO bounce from resistance and continue down or will it break up? Based on today’s action it looks like USO will bounce down.

However, I am not sure about it at this time and therefore I am placing a conditional order: if USO (oil ETF) drops below 38.34 I will buy 1 USO Sept’11 39 put. I will buy this put only and if the price goes down, so I’ll have confirmation that my expectation becomes reality.

Happy trading.