Stay Short

I will remain short the XLF. One of my short signals (essentially on an overbought setup that's too complicated for you to understand) was generated on last Friday's close. (FYI: the signal was also generated on SPY - historical results are similar)

From a non-mechanical stance, you'll also notice below that XLF has been making lower highs and flat lows (perhaps rolling over...or just sideways action?). In the short term I think we might move sideways but intermediately I remain bearish, and will trade accordingly (focus on finding short opportunities), until we are above the 200 day MA.

Of all my backtesting - and this applies to EOD traders, not day traders - the odds considerably favor short sellers when the market is below its 200 day MA and vice versa.

My immediate price target is 11.50 but if XLF gets to that level I will reevaluate. I hope Friday doesn't throw too much of a monkey wrench into my plans.

I imagine by then, my system will politely ask me to cover my shorts; however, I may choose to ignore that, even risk some profit, trade on discretion, and see if 11.50 actually holds.
XLF


SPY