The primary stock market trading model is the Dow and it has been SHORT since February 2nd. On that signal we bought the SPY April $275 puts for $6.20. Those ran up to $18.65 five days later. That rise moved the trailing stop up to $14.20 which was hit soon thereafter. With the trade up over 100% so quickly it made sense to take that optional stop, taking 1/2 of the position off the table.
Yesterday those April puts traded above $9.00 just before the close, making for secondary profit of about 50%. (If you rolled over into the Jun $265 puts, they are up about 25%.) So for the entire 10 weeks of the SPY put trade the position's gain (including the stopped one-half) is up about 60-70%. Not bad, but it pales in comparison of the +170% in just the first few days. There is no perfect answer when it comes to taking profits. Nonetheless, it is taking profits and not losses.
What we really need is some follow-through, and that might be right around the corner.
A new leg down would start that cycle all over again. On Friday a special alert was sent out suggesting adding to positions in the SPY Jun $265 puts. In addition, UVXY's hourly chart (below) goes back Long above $16, so any hourly close above that level will trigger a short-term Buy and offer an early entry into the next spike in volatility.
In summary, the Sell Signal of February 2nd is still in force and the market is setting up, or has already started, a new leg down, probably to at least the February 9th low, and maybe beyond. The gains we saw just subsequent to the early February Sell Signal are indicative of what is possible:
Short-Term Performance: February 8, 2018
A lot of follow-through and multi-weeks of these kinds of gains becomes probable. A new leg down and we are there.
Next update: Tuesday. Special Alerts as necessary.