Game Plan For Monday

The SPX knifed through its 200 DMA today after holding support for a good solid hour (humor attempt).

If Monday starts out lower my plan is to sell two to four individual stocks across the board for clients and then double up exposure to the inverse index funds I use. I will wait until there are about two or three hours left in the trading day to implement this. I want to give the market a chance to bounce. This will reduce my net long exposure by 8%-12% (the inverse fund is leveraged).

For all I know after I place these trades the market may be back above the 200 DMA by Wednesday so I plan on taking my time. If things have not improved I may sell three or four more stocks a week later and use some of that cash to buy short dated preferreds.

The names I will sell on Monday will be higher beta, growthier names; like a consumer stock and some tech to start.

If Monday is an up day I will wait until the first down day to take this action, unless we go back above the 200 DMA. After all I would rather not have to do this.

It is possible I might tweak some aspect of this, although I don't expect that to be the case, but for now that is my game plan.