Out Dow target of 10,000 came very close to being hit. The Dow touched 10,400 and had a violent reversal in the last 50 minutes yesterday. The bears were crying "foul play" when in reality, almost everybody was short and just waiting for the capitulation- it was a perfect time for a reversal. The VIX index was extremely stretched and it was a natural snap-back. Did we play it?
Yes. We sent counter trades out on the XIV beginning Monday @ 5.25 - When Tuesday came our plan was to double-up at 4.92- At this point, even we were scared to add more. We held our original position and added FAS at 9. Towards the end of the day we were getting anxious and decided to turn the computers off.....Then at 4pm we checked....WOW! Our instinct was right because the market ripped higher in the last 1/2 hour. We dumped our positions today in XIV at 5.60 and FAS at 10.10 for a 7% and 12% gain respectively.
Scary stuff!
