I'm excited!

"The worst day in 2019!"

This is the headline news you are hearing everywhere about today's panicky selloff. Actually point-decline-wise, it was the second worst day in the whole history of S&P since its birth in 1923. The worst day happened last year with 113 points daily drop in Feb 2018, just 3 points more than today's intrade worst decline. By closing though, S&P has "only" dropped 87 points, i.e. recovered 1/5 of the loss due to the final hour buyers stepping in. 

This is the first time I have heard "the worst" for the stock market for the year. After all, since my bold call at the very beginning of the year for a 20% increase for S&P, the market has had a one-way straight line only to keep going up. So till before today, we have only heard "new high" one after another, which has ignited some crazy euphoria we haven't seen for quite some time. As I have repeatedly warned, this kind of euphoric move is not sustainable and it is just a matter of time to see the reality check!  And we finally got that today!!

Today's panicky selloff did feel like a capitulation that should have wiped out most, if not all the weak hands. The  mood is really shaking now and probably a widespread expectation for more downside to go. I like this kind of universal extreme bearish mood. By no means I think the worst is necessarily over and we will likely see a lot more severe downside than this down the road. Having said that, it won't be a straight-line down. For the very near term, I'm seeing the extreme bearish mood and price actions by almost all the TA indicators. For that  I'm betting for the upside now. As I told my friends early this morning before opening, here is what I did for today: long SPY/SSO and short GDX/TLT/VIX.  

Of course, as a trader, I can always be wrong and therefore I won't bet on the farm. This is a very fluid situation which can always go to much worse with any headlines. For example, I just saw the announcement by the US government to label China as the currency manipulator, first time in the past 25 years. This is definitely not good news the market wants to hear and may spook the market further tomorrow. But I will add more long positions into further weakness now. My gut feeling is that we will see a heck of rebound in the days ahead and the mood by Friday may be a total reversal from today's! It is the time to risk a little but for a potential quick double or even several times gain within days. That's the beauty of swing trades at the extreme situation like now!! For that, I'm excited!!