The bears got a taste of trouble on Wednesday after more than a week of ruling over the markets.

I held off adding new plays on Tuesday because the Dow erased a 172-point gain to trade negative late in the afternoon. A brief short covering rally was the only thing that turned it positive at the close. I mentioned in my wrap that I believed a rally was ahead of us but I was worried the S&P would try to retest 1000 before it happened. I decided to wait one more day before profiling plays just in case we got that dip.

Today's +275 point monster short squeeze erased worries about a retest of 1000 but unfortunately it did not leave us an entry point for tonight. The odds are good we will see some retracement before the weekend.

If we can get a reasonable pullback on Thursday I will add plays on Thursday night. I would like to get some August options on the board before July expires and the volatility disappears completely.

Jim Brown

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