Below is an excerpt of what I wrote last weekend. 
Indeed we did see strength followed by weakness and a close below 198. Despite many bullish earnings releases on some of the momo names such as AAPL, FB, and BIDU the market is showing some relative weakness particularly in the IWM. We have seen this before and last time it was met with most technicians believeing the overall market would follow the small caps down; however that didn’t end up being the case (Refer to this post in regarding why most believed SPX would follow suit). So will the second time be any different? I say instead of trying to predict it we stay cautious and be open to either possibility.
IWM currently hanging on to its 200 day MA at 113.52. Below there it will be important for the recent low of 112.20 to hold or even more caution is warranted. Getting and staying above 114 would be a good first step to a possible recovery back to highs. 
The open interest on SPY for next week has a wide range with 196 being the highest puts and 202 being the highest calls. It’s possible to see more volatility next week given that next week we have the noisy events of GDP, Fed rates decision, Jobs #’s and of course more earnings. If the market should pull back, I would look for 196 to potentially be a floor or for price to get back above there if it does move below. On the upside there is free air for all time highs.
For strength next week I am interested in solars, Chinese names, some large caps such as HPQ that I highlighted Friday on twitter and or possible dip buying of some of the semiconductors if I see them begin to firm back up. If the market should remain strong, staples and some retailers look better as relative shorts.
Good Luck next week.
If you are looking for some specific trade ideas, open interest info, plus other good stuff then check out a subscription. Check out the testimonials as well.
Volatility Perking Up Next Week?
Below is an excerpt of what I wrote last weekend.
Indeed we did see strength followed by weakness and a close below 198. Despite many bullish earnings releases on some of the momo names such as AAPL, FB, and BIDU the market is showing some relative weakness particularly in the IWM. We have seen this before and last time it was met with most technicians believeing the overall market would follow the small caps down; however that didn’t end up being the case (Refer to this post in regarding why most believed SPX would follow suit). So will the second time be any different? I say instead of trying to predict it we stay cautious and be open to either possibility.
IWM currently hanging on to its 200 day MA at 113.52. Below there it will be important for the recent low of 112.20 to hold or even more caution is warranted. Getting and staying above 114 would be a good first step to a possible recovery back to highs.
The open interest on SPY for next week has a wide range with 196 being the highest puts and 202 being the highest calls. It’s possible to see more volatility next week given that next week we have the noisy events of GDP, Fed rates decision, Jobs #’s and of course more earnings. If the market should pull back, I would look for 196 to potentially be a floor or for price to get back above there if it does move below. On the upside there is free air for all time highs.
For strength next week I am interested in solars, Chinese names, some large caps such as HPQ that I highlighted Friday on twitter and or possible dip buying of some of the semiconductors if I see them begin to firm back up. If the market should remain strong, staples and some retailers look better as relative shorts.
Good Luck next week.
If you are looking for some specific trade ideas, open interest info, plus other good stuff then check out a subscription. Check out the testimonials as well.
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