Week of September 8

Back to buying the dip?

Recap of last week

Very tricky week to trade last week but we managed to hit a couple winners despite the massive bear trap (on monday) then bull trap (on friday).

We thought that we would see some volatility first week of September and loaded our puts back in August. On September 2, the SPX dropped almost 100 points, when we dumping our puts while the crowd was chasing the down move. We still hold these as a hedge, with room now to re add if the opportunity presents itself.

Bears looked like they were in control until the white swan of the GOOG anti trust ruling hit and with the two mega caps (GOOG + AAPL) ripping that was enough to put in a bottom for the index. Aided of course by the late shorts who were buying puts on Monday.

Everyone turned bullish again after a couple of green days, calling for 6600 next and we said the rally was fake unless SPX 6500 was hurdled AFTER payrolls on Friday.

That was another good call, as the people buying SPX +50bps on Friday in premarket are now in an early grave as stocks were dumped as soon as the market opened.

So was that a bearish rejection of 6500 or a bullish defense of 6360 this week?

Next move for markets