Current Long Positions (stop-losses in parentheses): PEP (70.10), CB (64.32), PCLN (502.75), KCI (57.69), SLV (33.36), PNW (44.78), NFLX (237.25), GLD (144.73)

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

BIAS: 50% Long

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

My Observations and What to Expect:

  • Futures are slightly higher heading into the open.
  • Asia was flat overnight, while Europe saw gains range from +0.3% all the up to +0.8%.
  • We touched nearly perfectly the descending bottom channel line, that can be seen in the daily and intraday-time frames. Should this hold, it would make sense for us to bounce in the coming days and make a move back up to the 1340’s.
  • The day after the previous options expiration week, we had a similar sell-off that marked the end of a previous decline before ripping off 7 out of 8 days where stocks moved higher (from 4/18).
  • Of note – we broke the trend-line the market had been previously trading on which causes us to flatten out the existing trend-line even more.
  • The most important price level on the S&P now become 1294, which now represents the previous higher-low. Break it, and things will unravel at the seams. Also a break out of or below the descending channel, would go a long way in changing the character of this market.
  • Volume was fairly light yesterday
  • My conclusion: I’m looking for a bounce led by commodities here and believe that today could be the start of one.

Here Are The Actions I Will Be Taking:

  • Scalped SSO on Monday for a 1% gain
  • Added GLD at $147.88, NFLX at $242.18.
  • Took a few losses yesterday: Sold KCI at $57.56 for a 2.4% loss, PNW for a 1.6% loss and CB for a 0.9% loss.
  • No changes to the stop-losses today.
  • May look to add 1-2 new positions to the portfolio should we see some strength/momentum behind today’s action.
  • I will start tightening the duration of the trades that I make – I’ll look for most of my trades to last 1-2 days at the most, should the recent market weakness persist. .
  • 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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