Mornings folks…interesting week last week. Volatility was def back. Not only id we have a failed market breakout but then followed up with a potential breakdown. We have been using the 10 and 20 day moving averages for support since September in a pretty tight uptrend. With that 20dma getting taken out there has been a slgiht shift in the balance of power. We still need confirmation as price. In nov we broke the 20dma only to fall to the 50dma and the dip got bought. The questionable part of the breakdown was that it happened on geopolitical news. In the past with dubai and eurozone issues the dip was completely bought up. will it happen this time?? hard to say and i dont have an opinion on it just yet. We do have some tailwinds this time especially with so many stocks getting ravaged during earnings season. We’ve seen nearly 2/3’s of companies beat earnings but forward guidance has not been so good with less than 10% raising guidance.
ideally if ur a bull u want to see this dip bought with vigor and snapback over 1300. this time with the russell2k joining in the party. Its not surprising to see this last breakout of the spx 1300 fail as the vol stunk, breadth stunk, and a bunch of safety stocks were leading the way (never a godo sign)
keep an eye out today…if we open green and get faded that will be an important tell. there are gonna be a lot of whipsaws along teh way this week heading into the jobs report.
if ur not a shifty trader its best to stay on the sidelines this week as ur moves will have to be quick and wiht precision.
im well over 50% cash right now….ill load the boat if we have a quick drop down to the 50dma. in the mean time…it might be best to reduce ur position sizes and keep port risk to a minimum
some stocks im watching
depo gonna be in play today.. already 1m shares vol premarket
i also like born and ccme on dips. FXI (china on support) if it can hold or snapback these 2 could really run hard.