50/50 Chance
Today’s article will be short, but may be a defining
moment. With less than two weeks to go in a surprisingly volatile
summer, there are two options for us HVT people.
Option 1:Â Get the heck out of town and forget about the markets until
after Labor Day. If yesterday’s action was any indication of the things to come,
this is looking like a smart choice. Remember, I am referring to HVT and not
position trading with regard to yesterday’s session. My only good trades
yesterday came from setups that were not HVT in nature.
Option 2:Â Hang around, but be selective, because the major indices are
trading around critical resistance levels, which, if broken, may offer some
brief moments of volatility as well as being indicative of a new leg higher in
the market.
Regardless of your decision, the last two weeks of August are notorious for
being slow. Most traders and other Wall Street types try to cram in that summer
vacation before the kids head back to school, and frankly, most people just have
other things on their minds. Given that historically the fall has always been
robust for trading, perhaps even more so this year, rest up and come back fresh
in September.
In the meantime, keep an eye on these levels for the market. They will prove
to be critical I suspect going forward, especially for the ever-hungry bulls who
have had little to cheer about as all the rallies this year have failed. This
should come as no surprise if you look at the daily or weekly charts. But
remember, those Wall Street guys wear ties, making them infinitely smarter that
us chart guys. Also, they play with OPM (Other People’s Money) and get
paid regardless of whether they are right or not.
S&Ps
— 935-42. Yes, the futures are overbought, and overbought can become more
overbought. Nonetheless, a pullback is definitely in the cards.
Nasdaq
— 1020. Same situation as the S&Ps.
Dow
— The Dow is in much better shape from a technical standpoint, but is still
overbought. Look to 8,862 for support.
SOX
— 368.36. Sure, it is overbought, but you know the old disclaimer.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 972-73 | 1065 |
| 960-62 | 1052-54 |
| 951-52 | 1034-37 |
| 941 | 1019 (key) |
| 929-32 | 1012 |
| 913 | 1001-04 |
| 968-69 |
As always, feel free to send me your comments and
questions. See you in TradersWire.