The last few weeks I have discussed the trend being up and the 2013 type of environment we had. It was good for those that were long. Momentum began to slow last week which should not have come as a surprise as the market had become overbought according to many different measures. I still believe we are in a buy the dip environment and next week intend to look for those opportunities. Energy, industrials, healthcare and select tech stocks are still out performing, but we have also begun to see some life among financials and solar stocks. Discretionary, retail, and housing have been showing relative weakness.
We are no longer overbought based on stocks making 20-day highs 
We are also working off being overbought based on stocks above their 50-day MA, but could have further to go to work off some of the recent buying spree. 
Next week we have triple witching. During monthly expiration I think the options market is more relevant than during weekly expiration. Unfortunately, taking a look at the SPY open interest this month doesn’t provide as much information as it has in the past because of the number of outstanding open contracts on so many different strikes. However, on the downside I would potentially see 190 as something that can help keep SPY propped up; but before getting there I would first look to the 20-day at 192.19 to offer support. On the upside I would see if price could stay above the highest call strike of 194, which it is currently beneath in the pre-market (as of Sunday evening). Next week I see potential strength in the Russel more-so than the Nasdaq and S&P 500. 
Other potential market catalysts are of course the current Iraq situation and the Fed Statement on Wednesday. Current expectations are for another 10 billion monthly reduction of QE. Important to traders will be any hints toward a movement closer to hiking interest rates sooner rather than later.
Stocks to watch on the long side: AMAT, WDC, SPWR, FSLR, YHOO, MCHP, LNKD, BIDU, GMCR, TRLA, Z, MSFT, HP
Stocks to watch on the short side: F, GM, M, URBN, LVS, PNRA
Have a good week. If you are looking for trade ideas and a whole lot of other goodies, consider subscribing.
Iraq, Fed, Triple Witching and Stocks to Watch
The last few weeks I have discussed the trend being up and the 2013 type of environment we had. It was good for those that were long. Momentum began to slow last week which should not have come as a surprise as the market had become overbought according to many different measures. I still believe we are in a buy the dip environment and next week intend to look for those opportunities. Energy, industrials, healthcare and select tech stocks are still out performing, but we have also begun to see some life among financials and solar stocks. Discretionary, retail, and housing have been showing relative weakness.
We are no longer overbought based on stocks making 20-day highs
We are also working off being overbought based on stocks above their 50-day MA, but could have further to go to work off some of the recent buying spree.
Next week we have triple witching. During monthly expiration I think the options market is more relevant than during weekly expiration. Unfortunately, taking a look at the SPY open interest this month doesn’t provide as much information as it has in the past because of the number of outstanding open contracts on so many different strikes. However, on the downside I would potentially see 190 as something that can help keep SPY propped up; but before getting there I would first look to the 20-day at 192.19 to offer support. On the upside I would see if price could stay above the highest call strike of 194, which it is currently beneath in the pre-market (as of Sunday evening). Next week I see potential strength in the Russel more-so than the Nasdaq and S&P 500.
Other potential market catalysts are of course the current Iraq situation and the Fed Statement on Wednesday. Current expectations are for another 10 billion monthly reduction of QE. Important to traders will be any hints toward a movement closer to hiking interest rates sooner rather than later.
Stocks to watch on the long side: AMAT, WDC, SPWR, FSLR, YHOO, MCHP, LNKD, BIDU, GMCR, TRLA, Z, MSFT, HP
Stocks to watch on the short side: F, GM, M, URBN, LVS, PNRA
Have a good week. If you are looking for trade ideas and a whole lot of other goodies, consider subscribing.
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