Wild Day; Watch HY Credit Spreads

Still long XBI, IBB and ILMN. Still long XLC calls. Went long META calls and EWG calls. Added more JPY calls. Added HG calls (copper futures). Still holding GE calls (Eurodollar futures).

Traded QQQ calls intraday.

Closed more TLT calls, still have some ZB calls.

Closed USO puts. Got out of long USO daytrade.

The next line in the sand is 3850 for the S&P 500 Index. Get above that and the rally can start taking shape, but there could still be a smackdown. The fact that JPY hasn't moved is not good, nor is the breakdown in the euro. I don't think those are necessary components for a rally, but they are potential nuclear bombs for the market should they collapse. The worst thing I see is HYG and credit spreads, also a big nuclear warhead hanging over the market. HYG was up today, but since treasuries popped far more, that indicates high-yield spreads are blowing out. My take is a rally requires those credit spreads to drop, then the trap door will slam on the bears. If high yield spreads keep rising and HYG breaks down, it'll be time to dump longs and go short for a plunge-o-rama.