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): Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), EIA Natural Gas Report (10:30am), Treasury Strips (3pm)

My Observations and What to Expect:

  • Futures are 1% lower. 
  • Asia is seeing markets range from flat all the way down to -2.0%. Europe is down on average well over -2%. 
  • S&P made a nice test of the lower descending channel yesterday and held it perfectly before bouncing into positive territory for the first time in eight days. 
  • S&P  formed a huge hammer on the daily charts on the biggest volume in over a month. Strong (sign despite today’s early weakness) that a reversal is near. 
  • We are still seeing price outside the lower-bollinger band on the S&P, which is nearly impossible to sustain. Today would be the 3rd straight day of as much. 
  • Dollar is showing a lot of strength, which isn’t helping the market either due to the yen intervention from Japan. 
  • Bulls need to do everything they can to hold yesterday’s lows at 1234. 
  • Volume continues to strengthen each day. 
  • 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: Very volatile day should be expected throughout today. Ultimately the bulls need to do everything they can to chip away at the huge sell-off from this past Tuesday, and eventually reclaim the 200-day moving average (still a long ways away at 1286).

Here Are The Actions I’m Taking:

  • Will be carefull about adding any new long positions to trade until we can show a bottom in this highly volatile market today. 
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

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