Monday, June 22, 2015

Jun 22 - Potential breakout or reversion to post OPEX weakness?

This is a tough call.  I am slightly bearish based on reversion to mean technicals but IWM is officially breaking out and QQQ/ SPY are very close to ATH.  We are at a lot of support/ resistances and the next 1-2 days should determine whether the market dips back into consolidation which seems more than likely considering how stretched the current move is.  If we don't pullback soon we might finally be breaking up and out of this multi month consolidation zone that has been difficult for both bulls and bears.

After being stopped out premarket out of SPY short, I re-entered at close based on the VXO support and negative divergence on the 1 hr chart on SPY.  That said, if we don't gap down or sell down an gap up immediately on open, we might be looking at a breakout and once again, I will exit.

If not, the difficult post OPEX seasonality that has been mentioned often could finally take hold and bring the month to a bearish close.  Almost every year in the past 10 years has turned negative, especially those that had positive OPEX weeks.

Crude is basing very nicely and a touch of the lower BB will a great long entry.

Negative divergence on the hourly.  We have had 2 sell signals fail.  Will the third do the trick?  If not, we are probably looking at a trend change.

SPY has not performed well after low volume up days such as today.  

$VIX touched its lower BB but it is not a strong signal like a hollow candle below the lower BB.  Stochs are also oversold yet.

$VXO, however, does look like it is ready to bounce.  I will watching this carefully tomorrow.

HYG is underperforming relative to SPY over the past 2 weeks.  After printing a couple of black reversal candles, it might dip back down and drag equities along with it.

IWM blasting off but far above the upper BB.  Waiting for signs of stalling or weakness but none yet and so far  a tough short.

QQQ right below resistance.  One more push up and this could be off to the races.

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Jun 19 - Set up of the year in financials

I am heavily long calls in $C, $BAC, $JPM for late Jun, July, Aug.  Mad conviction here.