On overall trading strategy for the coming weeks

As I mentioned in my Weekend Analysis on the Market, despite a losing week, bulls showed increasing resistance and so far the Aug.07 lows of the major indices remain intact. Given all these, shorting aggressively at this level has a poor risk/reward ratio, to say the least. On the contrary, going long here to catch a quick rebound has a much better risk/reward ratio, that is if you know "How to catch falling knives"! Technically, the most sound swing trading strategies at this point are either shorting aggressively if the market breaks down the Aug.07 lows or waiting for the rebound to fully run its course and then establish short positions using key resistance levels as stop loss points.

On volatility and my last week's trading calls
Market volatility increased notably in the recent months, and according to this excellent analysis by Dr. Steenbarger, the volatility will continue to increase.
The increasing volatility probably contributes to the fact that while many of my Last Week's Trading Calls were on the money, some missed by inches (such as AAPL long call with a stop at 179), some missed by a mile (such as CME, though I made a good real-time adjustment and ended up a trade with 26 points gain). In light of this, I will try to take rising volatility into my trading calls, which will translate into wider entry zones and stop-loss ranges. To compensate for such changes, I will either use smaller position sizes or be more active on real-time adjustments.

I will post my weekly trading calls on Sunday Jan. 13.