It's really hard to tell what the market is actually doing other than the inverse H&S price pattern seen today that I doubt was coincidence.
Remember it was a couple of weeks ago (I think) that I said, "We aren't near the big picture, WE ARE IN THE BIG PICTURE" and as such, I like to have a large percentage of my short set ups ready and I have had them ready, a few were closed for bounces like XOM, but I think it has a bit more on the upside, Energy broadly speaking on the other hand looks troublesome as I just posted.
Here's a view of the big picture we are in.
The kiss use to be right at resistance or the bottom of the channel before everyone started using technical analysis, now traders still expect that and place stops just inside the channel so Wall St. almost always takes price back inside the channel to knock out those stops as you can see above.
Mow we have another pullback to 100-day support, this is hairy because a break here is a bad break. I'm guessing we head toward that little gap in yellow at the far right, perhaps lower at a gap around $1654, but I'm guessing it will be more extreme.
As far as assets and signals today, HYG and Junk credit both outperformed the SPX as did the skittish HY Credit, not only on a 2-day relative basis, but at the close as well.
Credit points to a bounce, not much more.
As for VIX futures, they hold a short term and longer term hey (both timeframes relative to the bounce expectation).
ES 60 min also looks set for a bounce, although noisy still in many other places.
Our sentiment indicator HIO made more upside ground today suggesting pros are expecting a move higher, FCT which was in terrible shape is at least now in line and staying that way.
I see a number of trades setting up.they don't look quite there yet, Silver may be an exception and I already started a position there that is in the green from a day ago. This morning before the open both silver and gold were slammed down and then formed kind of a bear flag in futures. I guess I don't need to say it, but I still like the GDX short / DUST long, if I see a pullback that makes sense as a new entry, I'll alert you.
SLV...
You saw MCP earlier which is close, also UNG which is on track, but not at an entry point.
I didn't want to take chances with speculative positions like the $85 Sept. XOM call so I took half off the table for nearly a 40% gain, however if it opens up a new entry, I'd add it right back.
I think transports are going to set up for a long play, these can be played with options or just long IYT as they are quite volatile,
I wouldn't jump in right this second, but it may set up tomorrow or really any time as these divergences are moving so fast since yesterday afternoon.
FSLR is another potential add to/ new position
If today was about solidifying some of the divergences that took hold yesterday after the dump down, today was about continuing that task. Tomorrow would be about getting all of the short term ducks in a row and setting up entries.
There was one thing I noticed early and was happy to see it, stocks here and there are one thing, but the Tech sector is another and I saw strength earlier today, I just checked again and it looks even better, so an entire sector and an important one at that.
And the important 15 min starting to lead today.
This doesn't mean I like AAPL here, in fact I don't but we'll keep an eye on it.
Basically for me most of this right now is about position maintenance like closing out some of the XOM and locking in the gain, otherwise it's about being patient because not much is happening that I'd want to be real exposed to short term until all the ducks are in a row. As I said above, if today was about seeing a carry through of yesteray's positives, tomorrow will be about either making those stronger and/or getting the timeframes in order to make for high probability positions with low risk.
I'm not going to put out sub-standard trades, especially speculative ones. Like a good wolf-pack, a lot of the hunt is just lying in wait.
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