Interesting Action Today

The (UDN) trade went well one day into it. The ETF was up almost 2% today. The call option trade didn't officially move, but the bid-ask changed for the better. That was an encouraging sign. Remember, this is a longer term trade. The indicators are showing that the ETF is getting a little ahead of itself so expect a pullback. Not to worry, you have several months until expiration.

Overall, the markets ended mixed with the NASDAQ ending lower and the Dow and S&P up slightly for the day. This came after a two-day rally in the markets. I still think these are times to get short for a shorter term trade. Long term, it looks like we might see a nice rally, but we will probably see nothing until the new year. So until the calendar changes to 2009, you whould probably be net short of the market. I am.

The other interesting action today was the divergence between the dollar and the price of oil. When the oil market was screaming higher, you could just see the dollar go lower and the price of oil go higher. It happened every single day, say in and day out. Today the dollar was appreciably lower and oil was down dramatically. It was obviously not the first time it happened, but it felt different. I am not sure if there is anything here yet, but it is something to keep an eye on.

If we keep up the positive action over the rest of the week and going into next week, when everyone is back from vacation, I might get more bullish. Until then, I stay short the market because I believe we still head lower. There will be some earnings announcements in the coming weeks I will look to trade but we will go over those when they come up. Until next time, stay low risk.