Heavy selling and a Trin close above 2.0 on both the NYSE and NASDAQ. If we cannot close higher tomorrow we are in for new lows on the year, but as always there are two sides to every trade… Bulls see: Pullback before making new highs (look at Feb 25, same setup). Bears see: Head and Shoulders, looking to make new lows on the year. Tomorrow is the monthly Fed meeting announcement. We are expecting them to leave rates unchanged…
Looking to add to longs on a move above the high of the low day in this pullback. We still have unfilled gaps on the ES to the downside at 1085.50 and 1054.75 and to the upside at 1155.00 and 1198.75.
The VIX (Volatility Index) has pulled back which brings up the idea that there could be some sustainability to this rally. We are expecting a bullish OPEX Friday and a selloff to the 20MA next week. This will provide a great opportunity to put on new positions, both long and short. Took profits on some GLD, looking to grab more if it dips to $120.
If you’re still buying June options, well, shame on you. Options Expiry is Friday and it is also a Quadruple Witching. Look for continued strength to end the week and a selloff next week.
Today we saw a close above the 20 Period Moving Average across the top line figures. This is something we have not seen since early May. We are bullish for the time being, however do see shorts setting up in the near future. Looking deeper into the leading industry groups we see things like Paper and Tires, rather than Banks and Biotech’s, thus are labeling this as a dead cat bounce until we break $1148 on the S&P. Since GLD…
The S&P failed to close above its 20EMA which is the trend changing level we have been talking about. We touched the $1101.75 gap fill from 6/3 to the tick and it ended up being the high for the day. A break above the high of today and we are bullish, break below and we are bearish. A big move is on the way.
We’re not out of the woods just yet. It’s not that we’re permabears here at TJMacTrading, simply remaining objective. We traded average volume on today’s advance, with the VIX down just slightly. The put/call ratio remains over 1.0, and has for some time, never breaking the .90 mark as of late. We have two scenarios from this level that will pan out next week. Scenario 1: Shot covering rally to retest S&P $1105. Scenario 2: We rollover from these levels…
New lows on the year here we come. S&P 1005 is our target since the bulls have failed to hold this market up. With futures rollover tomorrow intraday trading may continue to be choppy. Nonetheless we did see a great long entry last night right up to our 1074 short on the /ES. We haven’t added any new swing trade positions at this time.