Very brief market read as I have been without power on and off for two days. Make sure to read notes on the individual charts:
Wow, +218 $SPX points in a monster ripper! Where to from here? I still believe we go into a great dip buying mode now, and we push into year end. The ATR is finally settling down. 1274 is major long term support with the 200ma at the same spot. would be nice to hold this level, but certainly not mandatory. A couple days of sideways action would be perfect, but I doubt we will see that.
We had intervention in the currencies market last night, which is putting a lot of pressure on the markets. The dollar went nuts running from 75.10 to 76.45 blowing through two resistance levels of 75.69 and briefly breaching 76.35. It has since pulled back some. I still believe this is not a bottom on the $DX_F. If it rolls right back over, then this will just be another shallow dip on the $SPY.
The $NYMO is still in the stratosphere, coming into the week at +77.29. A pullback or sideways digestion would be best to get this thing back down.
Again very brief read, as I was not able to very much homework over the weekend with this storm that hammered the east coast.
We have a rising spatula on the 30minute $SPY chart at major resistance of 126.00. Trading in a gap right now that started at 122.94 and fills at 121.66. The all important 20ema is at 124.12 and the 50ema is at 123.66, with major support of 122.08 just below. If we see significant weakness, I am looking for the 200ema at 120.84, which lines up well with SPX 1206. That would be my downside target for the short term future. This is a monster, and I still expect dips to be shallow and bought.
On the $DX_F 76.35 is resistance. The 200ma is at 76.71. I am looking for the weakness to continue, but we may bounce here short term, which is fine. It would slow this rally down and let it digest some more. Before we see a serious reversal I believe we tag 74.57 at least.
Looking at $POT short. 50.40 is “key” long term resistance. If we see weakness in the market then I like shorting against that number. A tight stop would be breaking that recent high of 50.74. To give it more room so to speak one could use 52.05 as the stop. The 50ma is at 47 and would be the target here. Major support is at 45.80. Reports Thursday morning, be out by then. I am really only looking at this for a daytrade.
On the $DX_F 76.35 is resistance, with a real brick wall at 77.50. The 200ma is at 76.71. I am looking for the weakness to continue, but we may bounce here short term, which is fine. It would slow this $SPY rally down and let it digest some more. Before we see a serious reversal I believe we tag 74.57 at least. These are some ugly charts, and any bounce will more than likely be faded.
I like playing the big names 1-2 weeks prior to the earnings report when they sell off, and $BIDU fits the bill as it reports this week on Thursday night. 120 is great support. I believe it holds it and makes a run for 130+ prior to Thursday night. I am looking to buy the November 140 call’s between 3.00-3.35. I like selling the November weekly 140 calls on it before the close each day to catch the theta burn, and cover them in the morning. If this runs to 130 prior to Thursday’s After hours earnings report they should double. They we can sell 75% of the position +100% and take some house money calls into the report. If this lost the 120 area early Monday, I still like it for a run, just will have to adjust which calls I use. This usually sees heavy volume when it “Sells off”. Notice this recent 20 point pullback was on light volume. Classic pre-earnings shake just like the $AMZN from from three days ago at 229 where we bought calls for the earnings run. It has hit 237 already and has two more days left.
The weekly chart looks poised to me. Keep an eye on RSI as it is about to blow up through 50, and the MACD is about to put in a bull cross, the first since July 2010. Stochastics are coming out of Davey Jones locker.
If the transports break out like I think they will, I love this one. 68.75 is long term resistance and it is cracking it. Has all the moving averages under it, and a ton of free space overhead. There is a gap to fill at 70.42 which would be the first target for a day-trade, but I am thinking bigger on this one. The next resistance doesn’t come in till 74.75. I really like the November 67.50 calls on this at 3.50.
So many of my favorite energy names look like this. Stalking a potential inverted head and shoulder patten here. A pullback to support of 82.75 would do the trick, but it does not look like that is going to happen. Instead it is coiling up just under resistance of 92.25. So I am stalking the move over that number, and if conditions are right, I will take it there. First target will be the 50ma just overhead at 93.14. Honestly I think in a rip this can see 95+ fast. The next big resistance is at 103.30. On the original entry I like a 1 point stop. Lets see how it handles that 50ma. Also eyeballing November 95 calls here at 2.89.