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Hold on to your Shorts?

 Hold on to your Shorts?
 
Well,  if you are an intra-day trader, the answer was no for today. If you are a swing trader or even an investor, the answer for now would be yes!
 
After Friday’s sell off , many came into today thinking, ” if the market gaps higher, I will look for a short entry”. The markets, however, as always will have its own mind and make its own decisions. After gapping higher, the indices continued to push higher, which ultimately caused the shorts to scramble to cover. Once again, the short side of the market could not get a 2 day follow through. Frustation, frustration, frustration, if you have already committed yourself to the idea that the markets will correct 5-10%.
 
If I am a swing trader or an investor, I still feel somewhat secure with my postion noting that the $SPX failed to trade above friday’s high. However, any trade above the 1209-1211 would certainly make me worried.
 
For tomorrow’s action, we will be monitoring these levels to see if the markets want to trade even higher, again causing the shorts to puke up their positions, as they have tried and tried again, but have failed to get any follow through. If we see some downward pressure, we would like to see the market trade below friday’s low of 1186.32 , which then can generate more selling and a test of the 1181 level. If the 1181 level is breached, HOLD on to your Shorts!
 
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