Sunday, December 20, 2015

Dec 19 - Bounce probable in equities this week but longer term picture looks weak

Lots of near term oversold readings and likely to see at minimum a slowdown of the recent selling but it will be important to see bulls take over or the market for the long term will be setting up for a major decline.  Still holding the long GLD/ GDX positions from 2 weeks ago and small VXX puts from Friday close (that I will close out at latest end of week).  Waiting to see if this bounce appears and whether we can short into it.  The big play will be going short in  January/ Feb for a major decline.

SPY on the hourly is showing a buy signal but for how long is the question.

SPY still in the consolidation zone but doesn't look good that we have had so many failed attempts.

 QQQ could be construed as having a bull flag but the fact that the other indexes look so tired gives me less excitement here.
 IWM looks horrid.  It bounced much less than I expected after the excellent buy set up from September.

Major buying of SPY/ AAPL on weakness according to WSJ.  This isn't a great indicator but is good for checking if moves are starting to become overdone.  If it happens a few times, it is usually a good idea to build skepticism about current trending positions.

HYG has always bounced when closing south of its lower BB.  This week it printed a doji and a 2nd close south of the BB.  It could bounce strongly in the next 1-2 weeks.  This negative divergence is very extreme and looks like a problem in addition to the terrible breadth.

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May 15 - Closed out IWM puts for +120% and picked up DAL and HD Jun calls

I'm going to let the market do its thing this week and probably stay away from new positions until Friday unless something very good pop...