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OK, Snoopy Dance completed. I was pretty confident in the long signal Thursday afternoon, and loaded up on Calls which expired Friday (I have a witness, I swear). I hedged a bit, with OTM (Out of the Money) Puts - reduced my gain slightly, but cheap insurance in case of a catastrophic dive. I unloaded half the Calls just after the open Friday morning (in between Snoopy Dances), and the rest mid-afternoon when it became clear that we weren’t going to any significant new highs before the close.

I won’t talk specific numbers here, for obvious reasons. Let me just tell you, and the parasites that currently have a lawsuit against me for their car’s clearcoat scratches, and my ex-wife’s lawyer, that the overall amount is a small, insignificant number. It was, however, a sizeable percentage of my overall trading account (lawyers note: my itty bitty trading acount).

So What About Monday?

My RSI(4) trading method says the long is in place. My daytrading experience says Friday’s action didn’t look very pretty. My fundamental analysis says that the Fed dropping the Discount Rate is not only not the good news the market seemed to proclaim, it’s downright BAD news. The Fed has admitted they see the deflation, the looming crisis, and are warming up Ben’s helicopters.

However, these factors all work themselves out in different timeframes, and that’s what I hope to take advantage of.

Based on Friday’s action combined with the trading plan’s signal, I plan to get long again tomorrow on a drop below Friday’s close, somewhere between 140 and 143 on the SPYders.

That Long will be short-lived, because I think any upswing here will be short-lived. The longer-term (fundamental) situation is just too negative.

As I said in a previous post, I’m currently still in “Long-cash-Long-cash” mode, but expect to switch very soon into “Short-cash-Short-cash” mode, probably after the next time I take a loss on a long.

Let’s watch…