Friday Morning Commentary

FYI- The major indices have all hit or nearly hit the key resistance levels highlight for weeks now while the $SPX & $NDX start to roll off the top of those 60-minute bearish rising wedge pattern. Seems like the dash-for-trash (i.e.- frenzy buying of low priced stocks with horrible fundamentals) is still present in some names but seems to be slowing across the board. Personally, I'm being very selective on taking an new long exposure here and as posted in the trading room recently, I've started reducing long exposure and began scaling into the index short to hedge my remaining longs.

In addition to the TQQQ short, I just took a small starter short position in a TNA (3x bullish small cap ETF) as $RUT/IWM is currently trading at key resistance. As stated recently, my preference going forward will be to position in the most attractive individual (stock) trade ideas, both long & short and possibly some sector ETFs as I still see a mixed bag of bullish & bearish charts across the board. As such, I wouldn't be surprised to see the bears, who are calling for a sharp reversal & resumption of the impulsive selling that kicked off the new year, as well as the bulls, that think the market is on a straight shot up to new highs & beyond, both to be wrong. I'd still favor that bearish scenario over the bullish scenario by a wide margin but as stated recently, I wouldn't be surprised to see a bifurcated market in which certain stocks & sectors rise while others fall, created a choppy, difficult to trade sideways trading range for a while. If so, it will be a stock pickers market (vs. a buy & hold or short & sit tight market).

The index shorts that I took this week are only temporary hedging measures to offset some of my net long exposure. I plan to spend most of today & into the weekend reviewing the chart and compiling a short-list of the best looking individual stocks and sectors, many of which will be added as official (front page) or unofficial (in the trading room) trade ideas. I also plan to update the trade ideas, moving any recently stopped out trades to the Completed Trades category as well as re-categorizing some of the trade setups that recently triggered an entry as the Active Trades. I will do my best to reply to any questions asap.

Mar 4, 2016 10:20am|Categories: Equity Market Analysis|Tags: , , , , , |1 Comment

One Comment

  1. alshaw March 4, 2016 10:32 am at 10:32 am

    great job


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