A very late and chartless post tonight as I am just arriving home from an evening of recounting tales of my most recent journey to a group of friends. A couple of important price developments occurred Wednesday as the S&P 500 broke to a new rally high and closed above the high printed by last Monday's swing session. The market hath no fury like a bull scorned. I suppose sentiment was too saturated with bearish expectations for our inevitable decline to materialize today (err, yesterday).
Once again, price action was not backed by volume. Nevertheless, my price stops were hit and I was forced to at least partially cover shorts. I decided to await the next open to decide whether to get completely out and seek a better entry, and this delay is justified by the additional $123M of selling-on-strength seen in the spyders... quite a figure for such a low-volume day. The plan here is becoming defensive, unfortunately. Given the savagely weak market internals, the stop-hitting done today has a high chance of being the final head fake of the move, but stops are there for a good reason. I will have no qualms about re-establishing shorts at worse prices if the setup is compelling.
A big battle over gold 900 was won today by the sellers. I think it is very important technically for gold to regain not just $900, but $920 in coming days. As I mentioned in the comments section, however, my position size (all in silver) is small enough that I can withstand a 25-30% slump in prices without much concern. In fact, I would be adding on the way down.