The Closing Print live trading and financial blog during market hours.

We’ve been waiting for a signal and a direction in the S&P500 since late summer. The post Brexit bounce led to a prolonged sideways pattern that may finally be resolving to the downside.

The S&P500 (SPY) has been showing signs of cracking for over a week. Finally we broke through through the trend from February. Wednesday saw lack of conviction by either party, resulting in a doji. We took SPY 211 OCT16 puts, which expire the third week of October. Entries were avg. (0.82). With futures lower this morning, we will be looking for continuation and bear flags to confirm.

Stochastic and RSI have room to the downside, so we could move lower for a couple more days. MACD has formed a bear cross and resides below the zero line. The VBP support is 208, just shy of a 5% drawdown at 207.50. Targets are 211.24 and 208.00. A dead cat bounce will likely occur soon after this trip starts so don’t bet the farm on any one trade.


The Nasdaq COMPQ looks very similar. MACD and stochastic are heading lower. VBP support is really large, so we could get stuck at this level for a day or two, unless institutions get spooked. If we drop below 5150 the reverse Kirby opens up. Target support at 4990 (+/-).


Check the blocks channel for areas where we could back and fill. Also remember healthcare was sitting on its 200ma yesterday as we neared the closing bell. Financials start reporting on Friday, with big banks JPM WFC PNC and Citigroup leading the parade. They need to report great earnings. Just a thought.

Update: I received a few questions via email, so I decided to add an updated SPPY daily chart. We are looking for back and fill down to the target zone. Fibonacci 50% has a nice ring to it, with confluence at VBP support. We are looking for some sort of descending pattern, so our thoughts are we would drop into this pattern over the next several days, back and fill being the rule.


I have a Doctors appointment at 10:40AM so I will be offline for till about 11:30AM. Plan our day accordingly. I’ll be monitoring via iPhone.

Happy Thursday – Vinny