Blow-Out Spasm - 7/23/08

I was looking for a BLOW-OUT SPASM today. Another S4 with extremely high INTENSITY. PUMP-N-DUMP mutation said that the risk was certainly for a such a pattern.

I was short 1276.50 overnight, but as we hit a high of 1284.50 overnight, I knew that a SPASM HIGH was certainly possible. I covered for a small loss at 1277.00 and looked to re-short at 1287.00. Market went as high as 1291.50 on the SPASM.

It was quiet trading before, and after. This is typically how the SPASM works. Very quiet exhaustion.

This high of 1291.0 should hold for the next several days. We will get another scary sell-off soon. That will be the time to re-load the put shorts.

I covered all of my put shorts yesterday. IWM Aug 60, sold .85, bought .13. What a move!

The end was inconclusive. We need to review the sentiment tonight.