We warned of a nasty open this morning as futures were way in the red when we started our Sunday evening homework. The futures market opens at 6pm (EST) on Sunday and with the Dow showing a triple-digit loss to start trading, here were our comments for our Weekly Wrap and for the Daily:
“At 8pm (EST) Sunday night, Dow futures were down 145 points to 16,162. The S&P 500 futures were lower by 19 points to 1,838. The Nasdaq 100 futures were declining 37 points to 3,658.
This means the Dow will likely open below 16,200 and the S&P 500 below 1,840. The Nasdaq will likely see an open below 4,275.” (END)
The Dow is currently down 180 points to 16,141 while the S&P 500 is lower by 16 points to 1,843. The Nasdaq is declining 42 points to 4,266 after opening at 4,261. The Russell 2000 is off a 12-pack to 1,170. The S&P 500 Volatility Index ($VIX, 16.24, up 2.24) is up 15% and is back over 15. No worries until 17.50 trips.
We were prepared for the pullback as we have been locking-in profits on our call option trades while trying to keep our portfolio light. While it may be too early to enter the shark tank today, there will be plenty of opportunities for new trades this week.
We saw the same type of action to start February and we talked about higher price action into March and April if support levels hold. The bulls have a little more wiggle room to the downside but today’s close will be super important as they will need to hold prior support levels.
A bounce off the lows would be bullish depending on how high it is but we aren’t expecting too much of a recovery until tomorrow and the rest of the week – providing key support levels hold.
We have a Profit Alert on one of our trades that made us 40% over the weekend despite today’s drop. We have other trades showing some nice pin action that have been unscathed by today’s pullback so we are in great shape. We also have a few put option trades from February that are up nickels and dimes so our insurance policy is also paying off.
We could have additional Profit Alerts today and/ or New Trades as there are some earnings plays we like. For now, let’s hit the Members Area to go over the updates. Remember, stay locked-and-loaded into the close!