The pullback this morning will provide opportunities only if institutions show signs of interest. Therefore, we will look for signs of their buying through market internals.
Below are charts of SPX and SPY. Targets and support zones are noted. RSI will be closer to a buy point. Stochastic is already turning as we open near the 50ma.
Targets and support zones are noted. RSI will be closer to a buy point. Stochastic is already turning as we open near the 50ma. Watch TICK cumulative on all time frames. This is “real time” institutional sentiment and should be monitored for signs of more selling or increasing interest in supporting prices at current or lower levels.
Watch List – Wait for market internals to confirm. Only then would I be interested in taking new long positions. Consumer discretionary stocks were very strong last week. Watch this sector, the FANG stocks and “The Generals”. If the leaders falter we could be heading lower. If they see buying activity we may have a short term support zone at 232.00 (+/-).
Income Trades – protect your positions. If we hit your break even, (cost of shares – premium received) you should liquidate and buy back your covered calls. Alternatively you could buy protective puts.
The weekend video news letter explains our thoughts for the dollar and commodities, especially GOLD.
Good luck today!
We’ll discuss more in the pre-market show. See you then,
Vinny
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