Gary Cohn Resigns
The announcement of Gary Cohn’s resignation as top economic adviser sent news algorithmns into a frenzy. Last night S&P futures dipped (-40) handles at one point. Does the resignation of Mr. Cohn signal blood in the streets? We think not, atleast not yet as IBD50 and big cap stocks held up very well.
SPY in Context
No blood in the streets here, despite the hallabaloo about Mr. Cohn’s resignation. Price action is above major support at 270.00 (+/-) VBP levels. And yes, the 50ma is overhead and flat, but momentum has recently turned upward. My guess is we stay inside this equilateral triangle identified recently, we downside targets at 268 (+/-) and upside targets at 276 (+/-).
IBD50 – Blood in the Streets?
The top 20 IBD50 listed stocks also show buying, not selling. Many individual stocks are showing similar resolve, with AMZN, AXP, CAT, CSCO, DE, INTC, MSFT and countless others seeing bullish acitivity.
Sidenote: If United State Steel (X) moves higher this morning, currently (+1.30%), we will seek income opportunities again by selling the APR46C at $3.00 or better. Wait for “A” pivot in an ABCD pattern to STO these calls.
So, are we ready to pullback over tariff news? Or Gary Cohn’s resignation? Well. algorithmns certainly want you to think so. It seems like any news lately is reactionary. Few news and media outlets point to actionable ideas. It’s all designed to make you react on emotion.
The takeaway: SPY downside target is 270.00 (+/-) for now, with 266.00 a possibility. For the reasons above we think its more likely we stay inside the current triangle pattern. And, with stocks showing resolve, its an opportunity not a reason to sell. If anything sell some premium on positions in your portfolio.
We’ll be LIVE to discuss this and more at 9:20 AM.
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