Current Long Positions (stop-losses in parentheses): TICC (9.04), BRKR (12.95)

Current Short Positions (stop-losses in parentheses): LMT (76.35)

BIAS: 3% Long

Economic Reports Due Out (Times are EST): Durable Goods Orders (8:30am), New Home Sales (10am)

My Observations and What to Expect:

  • Futures are slightly positive
  • S&P left the door open to further declines in the days ahead, with yesterday’s bearish close. 
  • Break in the neckline on the inverted head and shoulders pattern, shouldn’t be a huge concern for the bulls – only if upon a bounce in price, it struggles to reclaim that critical price level. 
  • Market is no longer overbought. 
  • Next level to test for the bears is 1116 on the S&P, which represents the 200-day moving average. 
  • 38% Fib retracement on the S&P is at 1107. 50% is at 1094. Right now we are at the 23% retracement. 
  • The main goal for the bulls is to re-gather its footing, and push above the previous highs at 1148. 

Actions I Will Be Taking:

  • I’ll be looking to add a couple additional long positions to the portfolio this morning. 
  • Bought BRKR @ 13.78
  • Shorted LMT @ 71.67, to function as a hedge. 
  • Upon adding a few long positions, will not hesitate to hedge those positions with a short position (ETF – SPY), if the market wants to continue the selling pressures.
  • Gap as it currently stands looks fade-worthy. 

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