Long With A Hard Stop

Found an interesting snippet on Zero Hedge this morning (emphasis mine):

Paulson & Co. sold a third of the their SPDR holding which is quite a large liquidation. However, Paulson remains bullish on gold as was seen in positive comments he made recently so it would seem likely that this sale may have been an effort to raise cash after his fund suffered sharp losses in the last quarter. Some hedge funds sold the ETF to cover losses during a rout that erased $7.8 trillion from the value of global equities since May.

Gold bulls take note. In a world where oil, gold, and equities float higher more or less together, do not come under the spell that gold will reward you should markets crash. If markets crash, so will gold -- just like in 2008. It is an asset just like any other, and the paragraph above illustrates how quickly it will be sold -- along with any other asset -- when cash must be raised. Keep that in mind.

Futures are down this morning into the lower end of the zone I'm watching. I'm slightly long from the 1246 area on the cash S&P. I loaded up on UPRO, SSO, and SPY 126 calls yesterday then dumped the calls and trimmed the ETFs in the 1253 area. I'll look to do the same today down to 1240. I'm willing to be aggressive to protect the short line I've been slowly accumulating.

The hard stop on this trade is 1226.64. Below there the S&P could accelerate quite fast, and I would be quite wrong.