the Yuppie Pig

Today we had a strong morning, which reversed by the end of the day on strong volume. So far, the volume on this rally has been rather anemic which has been somewhat of a red flag. Today's increasing volume in the afternoon reiterates that red flag. The rest of this week, we will get a better idea of where things might go. Does 740 act as support, or do we break back below? The daily chart looks like a reversal day, but lets look at a shorter time frame.


The 60 minute chart is clearly oversold and finally rolled over on the MACD and broke the uptrend. I was early in starting a short position in SPY last week, but by the end of the day, that position is flat and looking promising. 740 and 720 are my downside targets for now.


I also took the opportunity to start a short position in IYR, which by the end of the day offered a 7% gain. Nice. Unlike the last rally in this sector, I wasn't willing to wait for the "perfect" setup before starting a position. It paid off this time.


I'm sticking to my trading strategy to cover on oversold conditions on the 60 minute chart and I'm not too focused on the overall index whether it is making new lows or pushing higher. So far in '09, it's been working great, so why mess with a good thing?