Downside Bias, Stocks
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Futures and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading .50 points higher and the Bond Market Futures are trading down 2 ticks.
Tonight we have three indicators pointing lower on the Market Bias Page. This suggests a downside bias for the stock market tomorrow. Therefore, you might want to look for shorting opportunities in the December Dow Jones [DJZ9>DJZ9] and S&P [SPZ9>SPZ9] futures. However, you might want to avoid trying to short the strong NASDAQ 100 [NDZ9>NDZ9] unless it begins to show signs of stalling out (i.e. if it takes out today’s low).
December Gold [GCZ9>GCZ9], on the Momentum 5 and Pullback Off Highs Lists, is consolidating at higher levels. Watch for a potential continuation move to the upside.
Volatility Watch
The December British Pound [BPZ9>BPZ9] is a low volatility situation (from Friday’s Volatility Explosions-Low Multiple Days List). Watch for a larger-than-normal move (in either direction) as volatility reverts to its mean.
Best of luck with your trading on Tuesday!
Dave Landry
PS-Reminder: Protective stops on every trade!