For most of the people that would be the best way to invest in the markets – you research fundamentals, you dig for information, you compare long-term charts and competition, and then you make the move. You invest in several companies with the idea to hold this positions, at least 4-6 months.

For me, as a trader, this route doesn’t work – my capital is my working tool, and I cannot afford stash it away for half of the year.

So, now I am back to trading options, which are great tools to achieve higher return with well managed risk.

The chart below indicates, that the pullback we witnessed for the past 2 weeks may well be over, and some kind of rebound is going to happen soon. And by buying 3  Google Calls@Feb for 1.98$ I am betting that it has already started.

My stop is below 525$. My Targets are 550 and 570 (gap close)

Still, there is plenty of opportunities out there, especially among individual stocks. I will post a list of most interesting ones later this week.

As for now, here is my view on the market. It looks like the market is straggling to make new highs, every 20-30 point move is met with the 20 point sell off. Though, we haven’t sold off yet. This makes me thinking, that we won’t, at least in the near term. Someone wants it to hold, and every pullback of 20-30 points is bought back. Also, all major resistance lines have been broken, opening more room to the upside. This are all indicators that we are going higher longer term.

The general rule is, that after a strong up day, similar to the one we saw yesterday, there is usually a continuation rally the following day. So, Right now, 1140-1142 offers a nice support level. Buying here with the 5 pt. stop is a good R/R trade. My target would be at ~1210. If a breakdown below 1128 occurs, I would have to change my view on the future direction.

As always, we need to remain cautios, as at this point relentless buying is just not worth. As the indexes don’t offer much of reward right now, it may be usefull to turn your attention to individual stocks.

I have no idea of how long this party will be going, so I am placing my bets accordingly. Looking to short SPX futures near the 1135 area or on a breakdown below 1130 (see the chart below). Looking to add on the way down, otherwise will close for a loss.

SPX is continuing forming its rising wedge. To say fair enough, the chances of the sudden rise and the sudden fall are equal. For now I’ll stick with my view of a sudden collapse and will be looking to place short bets at a 1125 – 1135 area (see the chart below). There is also a possible Wyckoff Formation in the making.

GOLD also indicates, that the current rise might be done. See the resisting trend lines above? So, if you are into gold trading, I would suggest to short at 1122-1130.

PS. GOLD and SPX are trading at exactly the same level right now.

Stop 7 pts. Target 1015-1017. Will hold till day’s close.

If we fall below 998 – will reverse to shorts.

Short [[KBH]] below near 14.00. Stop ~15.00. Target 11.00-10.00.