Today's move was unexpected and has changed the character of the market and for the moment, it looks like the reversal is in. Take a look at my post right after the market close:
It's not time to add shorts, even with the big move. However, I'd like to see a pullback before long entry. A pullback close to the 50 day moving average on SPY sets up a good long entry. Unfortunately this pullback might not happen. The reason is there are a lot of scared shorts right now, and they may continue to cover positions tomorrow.
A day or two of bounce will setup "oversold" extreme or rubber band setups in some inverse ETFs, like FAZ and SRS, possibly at 15 for FAZ ann 40 for SRS.
Look for pullbacks in the indexes and focus list stocks.
Remember, we are now in a short term uptrend, so we look to enter long pullbacks and short once we see extreme overbought conditions. This is the opposite of what we had been doing.
I was stopped out of the remainder of my short positions (inverse ETFs) at entry levels. This locked in my initial profits. I currently have no positions.