Another Outside Day Averted
The market finished on a negative note, although it was not as bad as it was looking with an hour of trading left. The SPX was carving out what was shaping up to be a third outside day reversal (LROD), but then rallied a quick 5 points into the close.
The Nazz was a laggard today, falling by more than the SPX. Volume on the Nasdaq rose, making it another distribution day as well. Oil closing at a new high (>$70) certainly didn't help the cause.
The SPX is now trading below its 50-day support, while the COMP bounced higher off of its resepective 50-day today. I suspect this level will give way in the near-term. This week is options expiration week, so there is likely to be some volatility. I would not be suprised to see a nice rally at some point, but I don't think it will stick.
I will be looking at some selective short scalps to try to take advantage of potential negative earnings reactions. If you have any ideas that you think are good candidates, feel free to share.
posted by J. Kahn @ 1:30 PM
2 comments
2 Comments:
Eeesh, rough day in the market if you're long. Unless of course you own oil stocks...
I think all the easy short scalp picks are vanishing, as most of the obvious ones started down several days ago.
Depending on how much faith you put into technicals and charts, you could stand to short Valero (VLO) for a couple points maybe, but you're gambling on oil, and I don't put much weight in to technicals in the oil sector as there are too many forces with control of the stock price.
At this point it might be good to start looking for a bottom in some sectors that have been hard hit. Tech has taken a beating for nearly a week, and a significant rebound could coin you some money if you get in at the bottom (easier said than done, I know).
-Grant
I think you could be surprised by some of the reactions to earnings. It happens every quarter.
As for the bottom, I still think this correction has more time to put in before I look to get aggressive. But nothing wrong with staging your buys.
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