It was a choppy day today which was ‘saved’ by a late day rally. I’m trying to decide if I want to jump into the fray tomorrow. As long-time readers know the last two days of expiration week are supposed to be my days off. I really hate to trade with strike pinning taking place but at the same time this expiration could produce some explosive moves. I guess I’ll just play it by ear.
One of the things that’s making me lean towards trading tomorrow is that my intraday moving averages have finally crossed over to a bullish posture — even if just barely. Here’s are the 15-minute charts of the S&P 500 and Nasdaq:
If I trade tomorrow I’ll be looking for the faster moving averages to stay above the slower ones in the first hour of the day. And, of course, for price to stay above the averages.
Here’s what today’s bounce looks like on the daily charts. The indices made reversal candles (I guess they qualify as harami) and climbed back above their lower Bollinger bands.
Despite today’s bounce T2108 actually fell a little more to 13.59 ($SPXA50R is at 19.60). I’ll say it again, you have to be pretty desperate (or a greedy bear) to be a seller right here. Prudent bears will let the market lift before reloading.
No changes today.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Down | LA | LA |
| Intermediate | Down | Down | Down |
| Short-term | Down | Down | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
LA Indicates a Lateral trend
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I wrote last week in my blog:
“With the recent downdraft in equities, there is no danger of too many call options expiring in the money, so the jaded trader will look for a small bounce next week that will ace most of the put options that were bought in panic this past week.”
Also, I don’t know if you’ve seen their work, but Lowry’s has a publication called Identifying Bear Market Bottoms and New Bull Markets that might be of interest.
Here’s the link:
http://www.lowrysreports.com/research_studies.cfm
T.
Thanks Teresa. I must be really jaded b/c I’m looking for a big bounce!
There could be a big bounce too for all we know. We should check out the 90% downvolume information.
BTW, I went to a ton of meetings this week, and it is almost universal sentiment that the market goes down from here (bear market, the sky is falling) until year end.
Personally, this “feels” like May/June 1996, but no one else sees it this way.
Oh well.
T.
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