S&P breaks down: GM IPO only 2 days away...... oh no!

Yesterday I called out some levels that I believed would be key for today.  The levels were marked in Purple.

On the 5 minute observe the opening of the day.  Once the purple line was broken, there was a test within the first 15 minutes then on the second test the purple level was held perfectly, and the sell off began. If I had  the time I would have used that failed test as an entry point. 

Technicals:
ADX is the highlight today, a sell signal has occurred as the DI- crossed above the DI+.
MACD, Slow Stoch: both continue to signal momentum gaining for the bears.
Volume was quite strong today for the bears as well.  This could be the turn date but again, a bounce is expected and that bounce I will be shorting



I did however get into SDS a bit late in the day.

The purple line is the same level percentage wise as the purple line in the S&P 500.  The green line was my entry that I setup yesterday.  However, due to a human error the order I setup didn't get executed.

Mistakes are learning experiences, and i will not make this mistake again.
What happened was I used a Buy - Stop - Limit Order rather than Buy - Stop.
The difference is that when the level 27.07 was touched, the stop part gets triggers and the order becomes a limit.  If that price is never seen again which is what happened is the limit order never gets triggered.  Instead if I used just a simple Buy - Stop order, when the stop price gets touched the order becomes a Market order and will trigger the sale at what ever the market price would be.  In this case probably 27.08-27.09.

However, I did get in a bit later at 27.16.   And I have locked in a break even stop loss.  I am not expected much from this as my entry was glitchy but at least I have an in the money position in case tomorrow heads south again.  Hoping no decent size gap up, occurs tomorrow i this could be a solid starting entry if the selling continues, if not limited risk as I am setup for break even.


CIENA update.  Put option @ $14.00

I have been holding Put options for Ciena at a strike price of 14.  I have already mentioned in previous posts, I regret not selling this at the beginning of November as there was still a large amount of time value left and would have yielded a substantially higher price.  The price broke through 14 later in the day only to regain the level.  However the close price is a cent below the 20 MA which could signal that even if the markets are flat tomorrow Ciena could have a sell off.  If that is the case, i might take the opportunity to sell my options.   As options ex is friday, it will be very hard to time the sale of these.  If there is a strong down day again >1% I think a sale would make sense, if there is a flat day, I might hold until thursday.

Why is Thursday is so important?  GM IPO, news articles have been hyping this up, and they have apparently increased the share price by 14% to $32-$33 due to increased interest.  This is a chance for the US gov to get back part of their money, and in some ways is symbolic of the success of QE and stimulus.  The US gov was given a large portion of the GM shares in exchange for a bailout.  With the stimulus package and the subsequent QElite and QE2, the markets have rallied and it is time for them to turn a profit.  If the market is overall on shaky grounds on that day and the GM IPO tanks its first day, it could be a strong signal for the loss of faith in the current system.  I might be taking this out of context however, I do believe there is a level of symbolism behind this IPO.