LOVE IS IN THE AIR - 7/29/08

We are playing out the pattern that was established in April 2008. Just look at today's graph and compare it to 4/16. We have very similar features.

This is the SLINGSHOT trade. A RELAPSE and sentiment gets horrible on light volume. This creates energy for a SLINGSHOT trade. It feels too scary to trade, but it is a completely BULLISH pattern.

KEY FEATURE: GAP UP runaway open.

I continue to be short the 1200 puts. The hard part is now looking to roll up strikes.

EPILOGUE:
I did not trade today well.
I bought 1272.50 figuring we would only have a gentle dip before rallying to close at the highs. Instead, we closed the gap down to 1264 before rocketing higher. I stopped myself out at 1269. TOO TIGHT!

Tight stops are great for tactical trades, but what am I really trying to do here? Flip for a few points? Or get into a big rally (which is what I've been calling for). I have just not been good at this. This is a THEMATIC ERROR to consider. I think I'll call this NERVOUS NELLY.

Fortunately, I am still short my puts, which is minting money.