NOT YET

The market rallied for the third day in a row. I exited most of my positions yesterday so I missed today's move up. That's okay. My plan was to just get in an out quickly on this rally. I don't want to miss the next move down. I was looking to get in near the close today, but I still think we could move up a bit more. Volume was lighter today, but some of the market leaders showed some strength. BIDU, PCLN, AMZN, and WYNN (just to name a few) all advanced on equal or heavier volume. I don't need to build a big bearish position yet. That said, I did buy a few calls on FAZ and TZA. I would still like them to pull back a bit more before increasing the position. We are in the resistance area on the S&P 500 that I mentioned earlier in the week. What I'm looking for now is some signs of weakness. If we move higher tomorrow on lighter volume, that would be a nice bearish sign. I'd also like to see some weakness in the Dow Transports (IYT). A small move down on the VIX (or even a little spike) would also be a good sign. You can look at that 5 day rally back in early September as an example. The VIX dropped pretty big during the first few up days. As the rally started to stall, the VIX moved down in smaller amounts. On this latest rally, each move down in the VIX has gotten smaller. If we get a very small move down tomorrow in the VIX(and the market rallies higher on lighter volume), I will likely be ready to load up again on my puts. If we move higher tomorrow (or even Monday) on heavier volume, this rally might move up much further. Be patient though. If it does look like the rally could go up further, we would still be looking for a pull back before getting into any new bullish positions.

I want to thank all of you that have sent me success stories over the last few months. It has been great to see your success. It is the motivation I need to keep coaching. It should also serve as motivation for those of you trying to create your own success stories. Use these stories as motivation...not jealousy. For those that are still a bit scared to enter the market, try using your simulated trades. Buy some FAZ, TZA, and SLV calls in your virtual account and see how those trades work out. Those simulated trades will help you build the confidence to make real trades.