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Thursday, August 18, 2011

Out Of The Range Lower

The question yesterday was which way would we move out of the 1180-1204 range. Today it looks like the confluence area around 1165 is going to be tested.

The S&P cash never got to the 1215 level, only as high as 1208. I did add a little SDS but not a lot. 1208 was close enough that when the ticks started failing, it was "good enough for government work" and I started to scale in.

I also scaled out a little at 1190 just in case a rising wedge was in play. Obviously not, but you never know.

The Aussie dollar reversed yesterday, below my Fib target, thus saying risk-off, and there are some heavy losses in British and European banks this morning, but on low volume so far. In that it looks like the market will open around the 1165 area, I'll be hedging my SDS position partially. But since this move could easily extend and make new lows below the 1100 level from 8/9, I don't want to get too cute.

This week is option expiration. Expect a wild ride.

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