Current Long Positions (stop-losses in parentheses): BBBY (53.04), DO (71.97), SLV June $35 Puts, SSO (52.14)

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

BIAS: 70% Long

Economic Reports Due Out (Times are EST): Jobless Claims (8:30am), Productivity and Costs (8:30am), Bloomberg Consumer Comfort Index (9:45am), Factory Orders (10am), EIA Natural Gas Report (10:30am), EIA Petroleum Status Report (11am)

My Observations and What to Expect:

  • Futures are showing mild weakness prior to the open.
  • Asia was down on average 1.6% following the weakness from the US yesterday. Europe saw losses range from -0.8% to -1.1%. 
  • Yesterday’s sell-off was the worst that we’ve seen since 8/11/10.
  • Yesterday we saw the S&P close at a +10-day low, after having just closed at a +10-day high the previous day – which has only happened 3 years in the last 10 years, which isn’t necessarily a bullish/bearish sign, but does show that the market is highly choppy, indecisive, and unreliable at this stage.
  • Last two trading days have seen a noticeable increase in volume over the last two days. Often times these sudden volume increases can represent bottoms/tops in the market. 
  • S&P’s 1311 will be important for the market to hold. Should we fail, we will likely be testing 1294, which will cause the market to completely break down should we break it too. 
  • Also of note, we broke and closed below, the 10, 20, 50 & 100-day moving averages yesterday. 
  • My conclusion: I don’t believe that the bulls should close up shop quite yet, but the 1311 and 1294 levels on the S&P that I mentioned above should be the guidelines for determining one’s sentiment in this market. 

Here Are The Actions I Will Be Taking:

  • Closed out DO yesterday at $71.97 for a 2% loss. 
  • Added SSO throughout the day – still looking for a bounce on this trade – will close it out at some point today. 
  • Will add 1, maybe 2 new positions to the portfolio to the long-side if the market shows signs of bouncing today .
  • Closed out my SLV puts for a quick +25% return on my puts yesterday.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

You Might Like

  • fading the gap

    Fading the Gap: How Large Overnight Moves in SPY and QQQ Play Out During the Trading Day

  • how to trade a bear flag

    How to Trade a Bear Flag

  • Technical Analysis vs Market Conditions

    Technical Analysis vs Market Conditions: How to Know What’s Affecting Your Trades