Current Long Positions (stop-losses in parentheses): QCOM Oct 60 Calls, AAPL Sept 420 Calls, SPY Aug & Sept 136 Calls

Current Short Positions (stop-losses in parentheses): None

BIAS: 10% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Challenger Job-Cut Report (7:30am), ADP Employment Report (8:15am), Treasury Refunding Announcement (9am), Factory Orders (10am), ISM Non-Manufacturing Index (10am), EIA Petroleum Status (10:30am)

My Observations and What to Expect:

  • Futures are slightly higher this morning. 
  • Asian markets were down over 2%, while Europe was down about another 1%. 
  • Yesterday was disastrous for the bulls. Breaking through all levels or support, and finishing 5 points above the March lows. 
  • S&P as a result is in negative territory for the year. 
  • Interestingly enough, the VIX was in negative territory the entire day until the last hour, when it surged higher. 
  • Yesterday’s major sell-off had the markings of capitulation, particularly with the final hour surge in price that we saw in the VIX, and after the fact that the S&P had been down already 7 straight days.
  • Watch 1249 on the S&P today, as a move below it, would mark a new low for the market on the year. 
  • We have far exceeded the lower bollinger band, and the last time we did this we saw a major bounce in equities (from 3/16 lows), either we see at the very least a dead cat bounce, or we are on the verge of a market collapse. The former is much more likely. 
  • My Conclusion: Nothing is impossible, but we are in extreme oversold territory, so much so, that the lack of a market bounce here, could bring us something far worse in the market than what we’ve seen to date. 

Here Are The Actions I’m Taking:

  • Trade setups to the long side have been slim pickings over the last two weeks. 
  • Will look for new long-setups today in the small cap breakouts for a bounce off of yesterday’s lows. 
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

Join the SharePlanner Trading Network for Free – and be a part of the only Real-Time Trading Network.

You Might Like

  • South Korea and its impact on the US stock market.

    South Korea: The Hidden Driver of US Tech Volatility

  • Learn to trade within your means.

    Stop Trying to Hit Home Runs: Start Trading Within Your Means

  • Avoiding traps on stock breakout plays.

    How to Trade Breakouts Without Getting Trapped