Monday has the potential to be another Black Monday à la October 19, 1987, or, a melt up, à la 2009-2018. It also has the potential to be nothing out of the ordinary. These days, "ordinary," is 3-4% spikes in one direction, then the other, and sometimes back again. The good news is that this past week we were on the right side of the bigger spikes. The bad news is that spikes are the nemesis of a trend following, unless of course the spike is in the direction of the prevailing trend.
Elliott Wave pattern recognition analysis is pretty clear that the market is in the throes of a Wave 3 impulse wave down, intermittently tempered by quick and steep counter-trend retracements, oh, so taxing for put holders, followed by ferocious spikes back in the direction of the dominant trend all the way down to new lows. Wash, rinse, repeat.
I trimmed about 1/4 of my very bearish portfolio near the close on Friday. Had the market held onto its early losses I would have sold off more, but out of the blue (read: ruling elite) a 1,000 point pop in the last two hours of trading. That seemed too manufactured and therefore ephemeral for me to let go of more of my Short positions. Did I unload enough, or too much? Which brings us back to Monday.
Nevertheless, it was a profitable week for the good guys.