Last SPX Cash close: 1517.93
Last UVXY (long volatility) close: 10.53
Current position: short 1 lot of SPX (via SPXU). Avg px = $31.04. Stop is $29.1.
Position: currently BEARISH
Current Plan: expect to close shorts mid week
Expected position adds: add 1 lot SPX (via SPXU) if 1520+ intraday. add 1-2 lots long volatility via UVXY.
The following is a redacted version of the hourly chart I look at.
Short term (next few days): SHIFT TO BEARISH
SPX is likely to make a new incremental high on Monday 2/11/13. Unfortunately, I am seeing this as short-lived. I am expecting a revisit of the red neckline between 1490 and 1495 by mid week before a small bullish move for 1-2 days.
Intermediate term (1 month outlook): SHIFT TO BEARISH
The intermediate outlook is bearish. The target is in the range of 1400-1420 by early March.
The overall thesis is the runup since December 31 of > 6% is coming to an end. The pattern formation is similar in form and structure to the May 2010 flash crash. Although I am not predicting something as extreme as the flash crash, I am still expecting a 5% correction.
Long term (> 3 months outlook): REMAIN BULLISH
The bigger picture is still bullish in my view. Current position is we will revisit all time highs in the summer.
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