When I woke up this morning and saw that the market was gaping down below the $99.5 in the SPY I was pumped! Finally some direction out of these dopey range market we established between 99.5 and 102 in the SPY. I came in with a short mentality as long as we were below that 99.5 level and it was just a matter of developing a more trading plan on the open.

I came in thinking about trading the triple leverage ETFs. To my surprise the IYF had not gaped down below the important support level of 48.8. Not the kind of setup I wanted. Ideally I would have wanted for the IYF to gap down below support so I could use that as my level to unleash the fury shorting FAS and longing FAZ into the retest of the level. To add to the complication, FAS was down about 6 and change in premarket and hitting the bids just for the sake of being short was just not an option. That silly ETF could pop 2-3 on the open and I didn’t want to be in a position of weakness being short in premarket. So I waited.

Given the rising volatility we had seen over the last few days I had considered a couple of scenarios: 1. commodities and financials would lead a temporary rally to 99.5 where we would fail and crack. 2. We would whoosh down right on the open with the financials trying to play catch up. Either way I was not expecting any kind of hesitation or the tight range nonsense. This market has been way over extended. Finally something good happens for the bears and you expect me to believe they are gonna sit on their hands to see if the bulls want to defend the gap? Are you kidding me? No, I was hoping they would come out with the fury. I was waiting for those sitting patiently on the sidelines to come out with the big money and smash some stocks around.

The market opened and the first move was to the downside on the SPYs. There was no real attempt to bounce at all. GS was near the 159 level which we identified as the neckline for a H&S pattern. IYF was not ticking up right on the open, the first ticks were down and we appeared to be holding. GS starts to lead the weakness in the financials, ticking closer to 159 and…. cracks, IYF gets through 48.8 and cracks. Theres my setup. Gmonkey go time: I smacked the crap out of FAS like a mad man.

Oh wait the buy the new f*&% low program is in effect in FAS. GS continues to party to the downside so I don’t fear the little upticks… oh wait that turns into 80 cents in my face. The first up tick of the day and I am short my biggest. Rip #1.

I covered 80% of the position for a good loss but luckily I was feeding the monster with my short SPY & GS and my tiny long AIG off the chirps on the desk. I got down to a small position and waited for the next signal. SPYs crack even harder, GS fails to lift 158.7 and FAS not showing strength anymore. I reshort some more, IYF ticks lower and lower and bang new low FAS. Back in with my full position on the short expecting the whoosh I had seen two opens in a row. And yes you better believe it, there it is the buy the new low program AGAIN. seriously who are these clowns buying a broken market. I believe I said ” Let me have 5B in BP so I can crush this F&*% market”. Level of frustration @ 3-4.

This abuse goes on for another 10-15 minutes and I am forced to cover my big FAS short for a loss 4 other times in a row off hitting the new low. I can hear the level of discontent on the desk from playing downside momentum so I decide to short into the pop aggressively. This time only it does decide to reverse. FAS 10, Gmonkey 0.

I stare at my pnl and it is not bad considering I had just taken 10 consecutive massive rips. I change my focus to GS as I was partying on that short and noticed that it was consolidating near the low. I leave FAS alone and attentively watch GS for a place to load up. It doesn’t pop enough so I am forced to short a bit into weakness, wait for a new low and confirmation on the tape from sellers coming lower. I get all that and I whack GS with fury…oh boy, those white prints looked familiar. Yes yes, buy the new low program in this one too. You gotta be kidding me.

All in all a very frustrating day. I liked the bearish price action in the close so I am expecting a gap down in the market tomorrow. Should we gap up then I would like to establish core shorts as long as holding below 98.60s in the SPYs. Should the volume be a little light or be more shenanigans tomorrow I will consider calling it a month. It is time to get some well deserved vacation time. Happy trading.