Where Are The Buyers?
Monday morning, post-option expiration and the buyers continued to send RSVPs to the party. The psychology of continued selling across the equity complex has led to a crisis of confidence for the bulls.
It cannot be argued that there is still a supply of stocks that players are looking to unload. Couple this with the inability for the market to develop any sense of “panic” and it leads to complacency. In other words, everybody is talking about why the market should be higher as we keep selling off.
Now that I am off my pulpit, let’s talk about today’s action. First, as I outlined in our morning call, the most bearish scenario would be a first-hour rally. This occurred, and the market has done nothing but head lower off our resistance zone of 1486.50-1490. I am currently looking for 1475 to trade shortly, as this is our next support zone. If the market fails here, the selling could accelerate and lead to a move towards 1455. This is not a day to pick bottoms. Stay with the trend and sell rallies.