Today saw an almost 600 point swing in the Dow, which closed up 299 points.  Breadth and volume indicators confirmed today’s reversal, the VIX dropped back to 28, and models started getting paid in US dollars again (not really).

The one downer today was the NDX.  Although the Nasdaq didn’t close green, the index almost completely closed the gap between yesterday’s close and this morning’s open, and obviously would’ve pulled much higher if not for Apple’s earnings disappointment. AAPL was off 10% today, closing at levels not seen since last October.  GOOG was down over 6% today, probably due to nervousness over upcoming earnings.

Needless to say, we now have a slightly larger cushion in our February DIA trade, which is now trading for exactly the price at which we entered. We will continue to monitor our open position and to look for appropriate opportunities for March positions. If the markets can stabilize here and then move a bit higher, we may be able to hold our February trade through a longer cycle.

But note that one day’s rally doesn’t change anything.  This is a short-term bounce, not a change of trend, and we expect to visit yesterday’s lows again in the coming weeks or months.