U.S. stocks were down Thursday as disappointing economic reports continue to be the focus point. Initial jobless claims rose by 12,000 to 500,000, and as expected, had a very negative effect on the market. What a surprising number!!!!
The Philadelphia Fed index unexpectedly plunged to negative 7.7 in August, marking a 13-month low.
Chart reading:
Nasdaq: LH, LL, very bearish, hit the 50MA and pull back. Higher Volume.
Dow: LH,LL, bearish, below 50MA, Higher V.
S &P: LH,LL, bearish, below 50MA, Higher V.
VIX: Again found support at 200MA, bearish
My strategy for tomorrow:
Still sideline. No position.
Reason:
1. OE day, historically it s mostly up.
2. From the put/call charts, and the rules of Max hurts, currently more puts Open Interests are still at beyond the current points. Only if the market trend up, these contracts will expire worthless, for all three markets.. therefore, suppose it should trend up tomorrow.
3. However, so bad indices came out today will have big effects on the market and any lower index or worse economic news will have extended influence on tomorrow's market.
4. After a big distribution day, it s more possibly going up next day.
Therefore, under the uncertainties about these, and conflicts in bullish and bearish factors, I am sideline again, but leaning towards the downside. And in hunting mode for any put options, at least for Sep's forwarding. If the market cant rebound, which will strengthen my bearing point of view, then I will definitely go short or start to buy some put options.
Key observing points tomorrow:
1. S &P: 1070 hold or not (if not, cautious!!!) Fib 61.8% at 1056. (From Cobra)
2. Respect the charts!!!
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