Well there we go… the SPX(1344.90 +19.36) appears to be getting off to a late Christmas rally.  I was really hoping this would materialize before Christmas and into the new year as my positions are heavely into 2X products that get killed by whipsaw.

Here is a six month SPX(1344.90 +19.36) chart that shows our current move, and that resistance is somewhere around 950. If we can continue to push through the 923 level we will be in good shape I think.  I’m expecting this to push forward towards 950 and take my profits at that point.

Right now, my _FPX position is just getting killed both in my personal and papermoney accounts.  Papermoney has a bunch of SSO(53.15 +1.49) and QLD(100.36 +2.66) as well that I added a week or two ago.  I’ll be putting in the conginent sale orders as we step up in that account as well.

This rally will likey not last, I’m expecting this to be a simple wave 4 of the major Elliot Wave pattern we are currently in.  This could rally up to the 1,000 level on the SPX but I wouldn’t bet the farm on it.  For me, 950 is the get the heck out mark.  I’ll re-evalutate at that point and possibly beging to get some longer term puts in place to pull down additional profits.

My goal this year is to trade a little less often, during the last three months of this year I placed litterely hundres of orders that were filled.  For a guy that typically places about 50 orders a year, that volume in Oct, Nov and Dec was just nuts.  Trading swings and trends in my wheelhouse, and I need to get back into that mode.

2008 was a great year with my personal account being up almost 100%.  I am down quite a bit from my peak in 2008, but still a great year.  I expect to have a great start to 2009 as well.

My personal positions on SSO(53.15 +1.49) and QLD(100.36 +2.66) will be closed out as soon as the SPX(1344.90 +19.36) gets close to 950.  I’ve been doing a lot of research on the current Elliot Wave targets and those coupled with the analysis from www.retracementlevels.com really makes me think that closing out around 950 is the way to go.

I have a series of conditional orders setup to close these suckers out as soon as we get there, if we run up, oh well I’ll miss a few points… I’m expecting that once we get to 950 or so we will begin the trek back down to sub 700.  I’ll be working over the next few days to figure out the best way to capitalize on the likely collapse.  Some of these orders get me out right away, and a few try to chase a run – that is tough to do with options…

Right now, I’m considering a series of trades including extremely OTM puts on the S&P 500 Cash Index, possibly some Futures Options (they are goofy, so I may just pass), some calls on the 2x Bearish products, specifically in Financials, Real Estate and emerging markets, and just a few flat out ATM puts on the index ETFs, 1x or 2x.

Anyhow, thats my story and I’m sticking to it. We popped up to somewhere around 918 on the S&P today, so hopefully we’ll see 950 by the end of the week…

On another note, the City of Chicago, per the local Fox station, is paying $20,000 if you’ll buy a home.  I did a quick search, and it’s true! Quick, buy your house with the new lower interest rates and get your tax incentives!

I’ve closed my FXP(22.06 -0.68), SDS(16.76 -0.49), and SRS(30.58 -0.96) positions.  I’ve opened an SSO(53.15 +1.49) call position for January as well.

As expected, it appears that President Bush is going to tap the TARP money to bailout the auto industry.  I’ve taken advantage of the low open this morning and scalped a bit of profit.  I set my initial sell orders a bit too high and missed out on some nice profits.  However, a quick 15% overnight scalp is not too shabby.

My portfolio is positioned all using the markets money right now with SSO(53.15 +1.49) and QLD(100.36 +2.66) as my two biggest positions.  I’m banking on a Christmas Rally in the next few days/weeks.

Well look at that.  Senator Reid decided to make a few comments this evening and the futures market seems to have absolutely fallen apart.

Today I closed out the majority of my longs and went into the following positions in my personal account

January Calls on FXP(22.06 -0.68), SDS(16.76 -0.49), SRS(30.58 -0.96) and a QLD(100.36 +2.66) hedge. 

It looks like my QLD hedge is going to get absolutely killed in the open if this after hours activity continues.  848/850 on the SPX(1344.90 +19.36) is a key level, and the /ES futures have just crushed through that over night.  I would not be suprised if we open close to limit down if this continues over night.

The prospects for the United States economy are pretty bleak right now, a bankruptcy filing in the auto industry won’t help that out very much. Personaly, I think it is the right thing and the only way that these broken companies can become healthy.  This is just going to be a very painful experience.

From a trading perspective, on a weekly timeline 810 and 757 appear to be the big support points.  If we penetrate 757, look out below we may be going down into the 600′s quickly on the SPX. 

The key thing to think about in this sort of a market is that you must be able to adjust quickly.  I’ll post updates on what I do with these positions.  I’m going to take a look early tomorrow morning to see what the markets have done overnight.  If we go LIMIT DOWN again on the ES, I’ll likely have a few trailing stops put into place on these options to capture some of the profits that are likely to come when the market rockets down in the AM.