Better lucky than good

Yesterday was a very lucky day and sometimes you need to have luck on your side!

I was watching the day closely to see if the downturn from Monday could get any traction but when it started to turn up from the US open I took my profits in CAT and IBM. During the morning in Europe, I had established a Bear Put Spread in Eurostoxx 50 so I had enough short exposure.

Just before the wave-(b) bottom in the chart below I established a Bull Credit Put Spread to play the bounce up to wave-ii (circled) in the chart below. Immediately after this trade, some news hit for Amazon and the market rallied.

I will look for a bounce up to 2645 – 2675 and depending on how the waves look I will position myself for the next proposed break to the downside according to the chart below.

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