I sold my $SPY positions Friday that I had entered at the end of day after the 50 day bounce with full size. I also traded $UPRO in my aggressive account from $89.44 to $94.97.  I am currently flat and in cash with no positions. This is an exit due to the appearance of an overbought condition and is based on some swing trade exit parameters and a loss of momentum among other variables.  Here is why I have currently taken a cash position and exited my long trade:


  1. $SPY once again has stalled at the 70 RSI overbought indicator on teh daily chart, this has been happening all year the trends stop at that line.
  2. The $VIX has reversed from a big trend down to increasing.
  3. $IWM has started to put in a top with two down days and undercut the previous days low on teh daily chart.
  4. Volume was absent on the holiday week.
  5. The risk/reward at these levels is skewed now against the longs, this risk is more to the downside here than the the profit available on the upside.
  6. The odds are that there will be better entries for longs in the near future
  7. Price is extended far away from the 10 day sma and even the 5 day ema and the odds are price will snap back to one of those levels sooner than later.
  8. If the short term up trend does hold we either go sideways here or we go parabolic the odds favor sideways or even down more than parabolic.
  9. We are way over due a retracement or even a correction before we go higher.
  10. It is better to exit at the first sign of weakness than to wait for the big reversal.