Tuesday’s Trading Plan: Market Bounce Take Two
Ryan Mallory | Apr 15, 2014 02:37AM ET
Pre-market update:
- Asian markets traded 0.1% lower.
- European markets are trading flat.
- US futures are trading 0.5% higher ahead of the market open.
Economic reports due out (all times are eastern): Retail Sales (8:30), Business Inventories (10)
h2 Technical Outlook (S&P 500):/h2- Second consecutive day of selling on Friday makes a possible test of the rising trend-line off of the August lows very possible this week (currently at 1789).
- Futures are strong heading into the open and creates a similar scenario with what we saw last week in terms of a dead-cat bounce after two heavy days of selling.
- 1814 represents short-term support for SPX which is just above where it closed at on Friday.
- Volume continues to come in strong on each sell-off.
- 30-minute chart of SPX shows a heavy breakdown and huge break of support in place.
- In theory any kind of bounce should find heavy resistance overhead at 1839-1840.
- VIX continues to spke higher - now at 17.03, but not nearly like what we have seen in previous market sell-offs.
- The most important trend-line and level of support for the bulls is the rising trend-line off of the August lows which currently sits at 1789. It wouldn't surprise me if that is where this market is ultimately going.
- The Market doesn't care about the economy nor earnings. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up.
My Opinions & Trades:
- Covered Bank of America Corporation (NYSE:BAC) at $15.84 on Friday for a 2.3% gain.
- Added one new position on Friday.
- Will look to add 1-2 new short positions today.
- Remain short MTW at 30.66, DOW at 48.30, KORS at 88.32.
- Short 30% / 70% Cash.
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