We love a good sell-off but we cashed in our index shorts with huge gains last Friday (you're welcome) and this morning, the Oil (/CL) Futures longs we kept (also picked for you in Friday Morning's PSW Report) are up $1,000 per contract at $46.50 and Gasoline (/RB) just hit $1.52, which is up $1,260 per contract and we are taking the money and running on both of those while waiting for the bounces to reload our index shorts.
It's really all about the Nasdaq (/NQ) which, so far, has fallen from 5,900 to below 5,700 but we'll be looking for a weak bounce over the 5,700 line (40 points) to 5,740 so going long on /NQ is a no-brainer this morning with tight stops below the line. If we make a strong bounce (5,780) today, then all of Friday's sell-off can be quickly forgotten but failing the weak bounce would be a bearish sign and we'd be looking for other indexes to short as well.
Mondays are, of course, meaningless days in the market, especially in the summer and we'll have to wait until tomorrow to see what's really going on but a huge correction like we had on Friday COULD lead people to contemplate that some of the overbought crap they have in their portfolios may not actually be worth 100 times earnings (yes you TSLA!).