Wednesday, September 2, 2015

Sept 2 - Equities in no man's land

Strong move in the indices but weak participation.  Given that we have a air pocket above, there is still room for SPY to move up.  But basically given we are right in the middle of two zones, doesn't make sense to take on additional positions, long or short.  Now is one of those moments you just wait until one of your targets is hit.  I am still long SPY put spreads from Friday and for now time value being burned off is keeping my position afloat but if it looks like we are going to breach 200, I will have to let go.

Potential scenario 1 - Grinding up to resistance then back down
 Scenario 2 - a quick retest of lows with some overshoot which IMO would be very bullish and set up a strong bounce as the fall would have limited downward momentum.

Scenario 3 - similar to scenario 2 where we would trash around ala 2011.

 Scenario 4 - A low volume bounce to resistance and major collapse.  This one could lead to a large overshoot to the downside.

Volume very weak today which makes this move suspect.  Right now, it hasn't been more than 2 days in a row of direction without a reversal.  So even if we go up tomorrow, it is very probably things go back down on Friday.


tellzhang said...

very nice! I think eventually we will go down. Maybe not lower low but go down for some sort of bottom. Thank you and keep the great work! enjoy the reading!

Greenlander said...

Thanks Tell. I am leaning towards scenario 2 or 3 but who knows. This is new territory and sudden at that. Just trying to map out different scenarios to make sure I keep my eyes open.

Greenlander said...

Looking good for the next week with the low volume reversal candle printed today in SPY. I would agree we might not see a lower low just some sort of retest of the zone.

Jan 20 - Equities caution signal, short SPY, NFLX

Call buying has come back and very good chance of a pullback here