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.