After taking a look at what the market did today I opted to move to cash in the after hours market. I mentioned this on Twitter with about 30 minutes to go before the after hours closed, so anybody who was mirroring my trades could have opted to sell as well. Here’s why I sold.

I’m not a big fan of holding positions when a company is going to report earnings or there is an extremely important Government report such as the employment report. This leads to much uncertainty and is very close to gambling.

The main reasons I feel we’re due for a bounce are:

  • We are oversold and outside the lower Bollinger bands at the same time on the three main time frames I use: Weekly, Daily, & 15 Min. I have found this to be a highly reliable strategy for taking profits when all three Bollinger bands are extended in this fashion, as they are on the Nasdaq right now.
  • Head and shoulders pattern is developing on the daily and we are now at support and likely to rest here and pop slightly due to being down 8/9 last trading sessions.
  • Market psychology comes into play here with the recent selling being driven by the unemployment data (Sell the rumour).
  • Selling pressure is easing with yesterday’s downside volume accounting for 97% and today it was only 63%.

I am not buying anything long right now and I want to be clear. Any bounce that occurs I will be looking to open new short positions.

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