Event Fade Trade

I dumped my 250 QLD Ultra QQQ shares at $83.62 just before the close.

My thinking is that the market spiked today ostensibly on the Fed release. This is a big event, and we can expect the market to reverse over the next three days, as per the findings in Ben Warwick's book Event Trading. By the way, has anyone heard of this guy lately?

Note the drop in VIX - it is now down to 12.12, showing how volatile volatility is.

Post note added: ENCY sold at $2.79 and TWX sold at $19.35.

Sold SID

I sold 400 shares of SID at $37.60. This liquidation is a day earlier than planned, but the stock has surpassed my gain target for a rebound trade. Perhaps I should have waited one more day - after all tomorrow is a favorable calendar day, the end of the favorable period for March.

I will think about this some more, perhaps this is too discretionary.

Sales in The Morning, Buys Near The Close

I sold Adolor (ADLR) at $9.05 and bought 400 shares of Companhia Siderurgica (SID) at $35.36 and 500 shares of Time Warner (TWX) at $19.42.

The new purchases are to be held three days, during which time the market should rebound from this third 10:1 downside to upside volume day in three weeks. (That according to SentimenTrader.com.)

Month End Calendar Pattern Reverses

The amazing month end/start of the month stock market decades long overperformance may have just ended. The carnage we just witnessed embraced exactly that time span, and moreover, came after a nasty drop on Feb 27th, the 2nd last day of February. Many trading strategies (eg. Zweig and Ben Warwick) go long S&P futures whenever we hit the month end with the market under its 5 day moving average.

Many other recent tendencies have failed to hold recently (see sentimentrader.com) and so, like the old up Friday/down Monday pattern that got reversed in the '80s, we may be at the start of a huge change here too. Next month I will play this reversal with puts for the month end and calls for the 4th trading day - and I'll put that on my calendar right now.