As predicted in the Daily Charts yesterday caution was the right path to be taken, and no stocks to be bought. I took yesterday’s tape slowly and did not jump into buying any stocks since the futures slid the whole morning and brought the bears back to the table. The macro situation is strenuous for the market, the volatility is high and therefore you should take care today. It is also the end of the quarter, so institutions are taking some profits. I would recommend for the new money in-flows starting tomorrow, but in order for me to get bullish I would like the $SPY and the $QQQ to get perkier.
The $SPY did not make another low yesterday, but it did not manage to reclaim Tuesday’s half candle either, when it went to the day’s high it got rejected. This gave me a signal to stay tactical and wait for a better opportunity. We have two possibility in the $SPY today: we can go lower, and then break $437.04, and then this could signal the bulls are pushing at the gate; Or we could break yesterday’s low and slide down under the 100 day EMA, which would be a signal that a downward sequence is commencing. Wait for market discovery in the first 10-30 minutes.
We have a different situation the $QQQ as opposed to the $SPY because it made a new low yesterday and then it showed me a timid reversal to the upside. However, when it tried to take half of Tuesday’s candle we had the same situation like in the $SPY, it got rejected. This made me weary and cautious, and therefore I did not put my money into tech yet. I have those option call leaps I mentioned yesterday, but they are a long term play, nothing for these days. I am waiting to see if this reversal was real, or if it was a bear trap.
If it was not for $TSLA this week my optimism would have faded. If I bored you with this stock in the past days it is because it has acted impeccably in this red storm. It made a bull flag and it held it position throughout this bearish tape. Yesterday it was not very strong and I did not touch it as it was chaotic, but I still have some call options for this Friday, which are already paid for, by selling puts that became worthless. If it shows strength today it should not break the $766 level and maybe consolidate for a leg higher. Again, I am the least invested I have ever been in the past two weeks.
Words for today: Wait for market discovery, don’t get agitated at the open, even if it is a strong one, and stay tactical until a clear direction is outlined.
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