How I see today’s price action in the stock market. Could this be a downtrend reversal? If so, we may see a resumed rally. We also rolled some of our US Steel (X) strangles into the next week.

Ha, as I said yesterday the market rallied today (it was that proverbial flip on a dime) and today we saw this pattern:

Engulfing Pattern: A reversal pattern that can be bearish or bullish, depending upon whether it appears at the end of an uptrend (bearish engulfing pattern) or a downtrend (bullish engulfing pattern). The first day is characterized by a small Body, followed by a day whose body completely engulfs the previous day’s body.

If so, we are not that doomed as it looked like before. Is this a sure thing or just another blip of increased volatility and some chimera-like “concerns” of investors and talking heads who usually do not know what they are doing?

We will find out later on.

Nevertheless, today in the morning I rolled I few contracts against US Steel (X) into the next week and collected nice premiums. I will report the trades in my next post.