From the Trading Desk
Heading into the week the US market once again watched the Nikkei continue to move further into the stratosphere. Futures were pretty anemic heading into the trading session today. Overnight news focused on the plunge in precious metals as Silver and Gold were hit hard. Despite the negative open and sentiment both precious metals were [...]
The Big Wave Trading Portfolio remains under a BUY signal and currently has zero issues weighing on it presently. On the short-term the market is very extended in price compared to trailing key moving averages. Logic dictates that a natural pullback to some form of support levels (fibonacci, price lows, or a moving average) should [...]
The morning did not get off to a great start with disappointing economic data hitting the market. Weak jobless claims and a Philadelphia Fed manufacturing index showed how disappointing the economy continues to be. By mid-day it appeared the market simply didn’t care too much about the weak economic data. Just as new highs were [...]
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Markets Say No to Spailout, Stage Big reversal
The EU bailout of Spanish banks was received well when the futures market first opened Sunday evening. Sellers dominated the day as the markets sniffed out and disapproved of the Spailout. US equity markets did enjoy a good start, but selling was unforgiving and relentless heading into the close. Volume was higher than Friday’s dismal showing. At this time, volume is not going to matter as price action is clearly on the negative side. Price action says it all and it is not saying good things about this market.
Not helping matters was AAPL’s big reversal despite its annual June meeting. AAPL did not announce any new amazing new product like apple TV or a new iPhone. The stock now appears to be failing at its key 50 day moving average suggesting May’s lows may be the next target of the stock. GOOG has already had a head start on AAPL as the stock put in an ugly reversal day. Both tech giants do not look healthy at this point and will continue to put tremendous pressure on the NASDAQ if selling continues.
Volatility kicked it up a notch today getting support as the market digested the news out of Europe. The VIX jumped right off its 50 day moving average today and certainly shows a bit of a fear coming back into the market. At May’s lows the market failed to produce any sort of capitulation. The VIX never made it above 30 a key level where panic enters the market. Until panic enters the market we’ll likely continue to see lower lows and lower highs in this market.
Adding to the mess we call a market will be options expiry. Greek elections are being held on Sunday and combining the elections with Spailout options expiry will certainly add layer of complexity. It is crucial we stick to price action of the market rather than guessing what might happen if the Greek elections go one way or another. After today it is pretty clear the bias is still negative.
Stick to your stops and cut your losing positions. Your long term success in the market depends on it.