I entered a short to hedge my longs as planned. I have been trying SKF a few times previously but keep getting stopped out. So I'm giving a shot at DUG this time around. Today S&P broke down to the bottom of my up channel again. We could very well bounce back, but I needed to hedge my position as planned.
[caption id="attachment_980" align="aligncenter" width="500" caption="Ultrashort Oil & Gas"][/caption]
Upside: Positive divergence on the daily. Strong support at \$30. Unfilled gap above \$34.
Downside: Still in downtrend. EMA shows downtrend gaining momentum. Oil broke recent downtrend too.
Bottom line: This is a short hedge to safeguard my longs if the market do break down from here. As I noted before, this is a distinct possibility I need to account for. I intend to hold this for several weeks.
Target: At least \$34.
Stop: Observe \$25-\$26 level.