Thursday Flip-Flop – Rally Gets Manic/Depressive

You never know what you are going to wake up to in this market. 

This morning, the market is depressed, giving up all of yesterday's gains in the Futures.  So much so that we took a long poke on the Russell (/TF) Futures that we had been shorting from 1,160 – at the 1,135 line.  That's down 3% since we began shorting them at 1,170 on Monday.  

We're also taking a long poke on the Dow (/YM) off the 17,000 line and /NQ off the 3,900 line simply because they are good supports and offer good lines to stop out at with limited losses – certainly not because we think the equity indexes are cheap!

We're simply taking advantage of the wild gyrations in the market to make some short-term money, while we wait for our long-term premises to pay off.  

Even if you missed my call in our Live Member Chat Room (which you can join by subscribing here) and waited until you can read this post for free later in the day, you can still join in the fun by picking up the Russell Futures (/TF) when they cross over 1,140 or 1,145 and you'll only miss $500 or $1,000 of the gains but you still might pick up $300-500 over 1,145 before it turns back around (and we'll likely short it again when it does).  

Speaking of shorting – we haven't been playing oil lately as we lost interest in shorting it below $100 but this morning it's back to $102.50, so we're going to take a poke at shorting /CL again at what should be about $37.75 on USO. 

Very simply, per our 5% Rule™, we have a drop from $107.50 (which we predicted) to $99 (8%) in the last 3 weeks but $100 was our support line ($37 on USO) so call it a $7.50 drop and we expect a 20% (of the drop) weak bounce of $1.50 to $101.50 and a 40% strong bounce of $3 to $103.

Since oil did, in fact, fall to $99, we'll take a poke at $102.50 but quickly get…