New year, new trends, new opportunities. Of course the market is just going to continue from where it left off, but since we measure trends and out-performers (i.e. NFLX, AMZN) /under-performers (i.e. anything energy related) often by years, we will begin to see new ones emerge. What comes to mind in that sense is opportunity!
Last week here I discussed a possible market pull-back to get the VIX near 17 by Wednesday morning, but if you were watching the VIX Monday morning you would have seen that it opened above 17 which gave some clues that a rally was more likely. Although it was hard to play the indexes last week, the environment gave plenty of great opportunities if you were in the right place (i.e. AMZN, GOOGL). I also said that the best pin as of last weekend was 205. It didn’t exactly pin there, but it sure did a good job of hanging around that level.
Current market trend: No trend! Although there is no dominant trend, if you look across many sectors and stocks it does seem a bit more bearish, but still at a place that is difficult to find follow-through.
Oversold/overbought:
SPX stocks at 20-day highs: This is at levels that could lead to a bounce soon, but works better when the other measures are also at oversold levels, which is not currently the case as you can see below. 
SPX stocks at 20-day lows: Not even close to oversold. When this gets oversold it leads to more suitable bounces. 
SPX stocks above 10-day MA: Not yet oversold. 
VIX open interest: If there is to be a pin on Wednesday morning it will be around 16. Thus pay attention to where the VIX opens Monday morning. If the market gaps down and the VIX gets near or above 20, watch for a potential reversal. The opposite is true of a gap up in the market and a VIX under 16.
SPY open interest: Taken at face value this appears more bullish. Price closed below the high put strikes at 204 and 205. The current best pin is once again 205, however, if volume picks up next week with more traders/investors at their desk there is a good chance this open interest will shift throughout the week. At this point without having any idea how the market opens, watch for 1) a market dip into support levels and a VIX possibly near or over 20 for a possible bounce area or 2) SPY price at or over 205 and a VIX under 16 for a short area. If price gets above 205 and the VIX is still above 16 early in the week and breadth is positive and moving higher, then look for 206.50 to 207.50 as potential targets. Finally, watch out for tweet updates on any open interest changes as the week progresses. 
SPX levels of importance: to the downside: 2035, 2022, 1997 and then the gap fill at 1951. To the upside 2062, 2079 and 2093.
It’s a new year, come start it premium style with daily set-ups, analysis, real time entries and exits and lots of fun sass ;-).
A New Year & New Trends, But Maybe Not Yet
New year, new trends, new opportunities. Of course the market is just going to continue from where it left off, but since we measure trends and out-performers (i.e. NFLX, AMZN) /under-performers (i.e. anything energy related) often by years, we will begin to see new ones emerge. What comes to mind in that sense is opportunity!
Last week here I discussed a possible market pull-back to get the VIX near 17 by Wednesday morning, but if you were watching the VIX Monday morning you would have seen that it opened above 17 which gave some clues that a rally was more likely. Although it was hard to play the indexes last week, the environment gave plenty of great opportunities if you were in the right place (i.e. AMZN, GOOGL). I also said that the best pin as of last weekend was 205. It didn’t exactly pin there, but it sure did a good job of hanging around that level.
Current market trend: No trend! Although there is no dominant trend, if you look across many sectors and stocks it does seem a bit more bearish, but still at a place that is difficult to find follow-through.
Oversold/overbought:
SPX stocks at 20-day highs: This is at levels that could lead to a bounce soon, but works better when the other measures are also at oversold levels, which is not currently the case as you can see below.
SPX stocks at 20-day lows: Not even close to oversold. When this gets oversold it leads to more suitable bounces.
SPX stocks above 10-day MA: Not yet oversold.
VIX open interest: If there is to be a pin on Wednesday morning it will be around 16. Thus pay attention to where the VIX opens Monday morning. If the market gaps down and the VIX gets near or above 20, watch for a potential reversal. The opposite is true of a gap up in the market and a VIX under 16.
SPY open interest: Taken at face value this appears more bullish. Price closed below the high put strikes at 204 and 205. The current best pin is once again 205, however, if volume picks up next week with more traders/investors at their desk there is a good chance this open interest will shift throughout the week. At this point without having any idea how the market opens, watch for 1) a market dip into support levels and a VIX possibly near or over 20 for a possible bounce area or 2) SPY price at or over 205 and a VIX under 16 for a short area. If price gets above 205 and the VIX is still above 16 early in the week and breadth is positive and moving higher, then look for 206.50 to 207.50 as potential targets. Finally, watch out for tweet updates on any open interest changes as the week progresses.
SPX levels of importance: to the downside: 2035, 2022, 1997 and then the gap fill at 1951. To the upside 2062, 2079 and 2093.
It’s a new year, come start it premium style with daily set-ups, analysis, real time entries and exits and lots of fun sass ;-).
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