Current Long Positions (stop-losses in parentheses): TICC (8.51), EUO – UltraShort Euro (22.25)

Current Short Positions (stop-losses in parentheses): SPY (113.30), DGX (50.09), FCN (36.75), URBN (34.91), OMI (29.31), HSY (49.93), ADBE (29.78)

BIAS: 67% Short

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Existing Home Sales (10am)

My Observations and What to Expect:

  • Futures are down strong – about 1%.
  • Existing Home Sales will impact the market at 10am.
  • We are going to see a test of the 1056 Support level on S&P.
  • Morning action nullifies the bullish wedge we saw forming in the short term on the S&P chart. In-line with what I had expected (see yesterday’s Market Wrap-Up).
  • If we break through 1056 on the S&P watch for an eventual test at 1010.
  • Be aware though that it is not uncommon, and it has happened a lot of times recently where the markets sells off hard in the morning, only to rally back in the afternoon. Be prepared.
  • Price action is in line with late day selling yesterday.

Actions I Will Be Taking:

  • No hedge position this morning.
  • Will tighten stop-losses throughout the day on winning positions.
  • Will not add any new short or long swing-trade positions today.
  • Added EUO yesterday – by far my biggest position.
  • Added ADBE yesterday.
  • I am not looking to scalp or fade the GAP this morning.

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