Monday, July 6, 2009

Rested and Relaxed

After a few days away from the real world and coming back to focus on the market, I find the charts rather interesting and seemingly on the verge of a technical breakdown. The S&P crossed the 50 day MA and it appears imminent that the 20 ma will soon cross the 50 ma on the down side which could signify a major downturn in the market.

887 is the key support level that must hold. The VIX is showing weakness for the most part but it has made a nice run since the 25 area and is only a point from crossing the 20 ma. So I want to see that cross and see 887 be broken before feeling more comfortable with short positions.

I feel strongly that regional banks are going to roll over. Shorting KRE just seems like a no brainer here which probably means I am dead wrong. It just seems too easy. SRS may be a good short term play here as well but not as solid as shorting KRE. But it has more potential for larger gains while shorting KRE has limited opportunities.

That's all for now. I am still in vacation mode so can't spend too much time on free thoughts. :)

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