Intra-Day Update: Proceed with Caution

UPDATE 1:26pm EDT: Okay, I’m getting various reports and alerts from sources I trust – we are nearing a major snapback rally. It may occur today, tomorrow, Monday but it should be soon. My wave count tells me that we should drop further, but the market keeps bouncing off a bottom. Let it be said that I would recommend the less reckless among you to exit the market at this point. Yes, you might miss out on a few hundred points towards the downside, but better be safe than sorry. Remember, there will be plenty of opportunities to go short again after the snapback rally, and options will be a lot cheaper and defensible at that point.

With that said, Berk and I are still trading the downside, but I we are taking a risk here.

UPDATE 2:40pm EDT: If the Yen can keep this up we might just breach today’s lows in all averages, and if that happens we might see 9000 on the DJI today. Again, the applicable word is if – keep it clean and don’t get too greedy if we start dropping.

UPDATE 3:09pm EDT: Market just dropped off the plate and we just put in new lows for the year. There’s a buyer at around the 9k mark in the DJI, but I don’t think it’ll hold. We’re 50 minutes before the closing bell, and there should be more ugliness ahead – after all, who wants to hold into Friday when LEH starts to unwind their CDS exposure? Anyway, Berk and I are planning to start taking profits if we make new lows.

UPDATE 3:33pm EDT: What really jumps at me is that GOOG and BIDU are not budging and remain at their respective support lines, despite the market tumbling and painting new yearly lows. Thus, buying GOOG/BIDU calls at the end of today might not be the worst idea. Yes, we could drop further from here, but it seemes those two have found their level as of now. I expect more downside once we embark on wave {5} in a few weeks.

UPDATE 4:33pm EDT: WOW, what a day! I hope you leeches banked some coin, because Berk and I are swimming in it right now. We slowly started to cash out about 20 minutes before the closing bell and the timing was perfect, as we got marks on pretty much everything. When the market swung back up I had just closed my last contract. This was not my highest grossing day, but technically it was probably one of my best trading days in a long time. At some point in the morning I was about 10% down but I stuck to my guns and didn’t sell out, which was amply rewarded towards the end.

Big up to everyone who traded along here and didn’t yield to emotions. Go out and treat yourself and your spouse/partner – we traders have to endure a lot emotionally, especially in this market. So, when you win you celebrate the fact that you are 1 out of 1000 who has the skills and mental fortitude to make a living trading the markets. Congrats!

Finally, here are some images of my recent victims. As I said, my revenge will be brutal and merciless.

I have some errands to run and will do a quick update later this evening.

Cheers!