We are still trying to play catch up to the hour of sleep we lost Saturday night after the clocks in the US were moved forward. Alaska and Arizona are the 2 states excluded but we didn’t mind as it signals Spring is just around the corner and the weather is getting warmer.
Our chart work from the weekend showed all 4 of the major indexes at the top of their upper price channels and with global markets and futures down, we figured the stigma would carry over here at home.
If you haven’t logged into our Members Area to review the chart work then please do so at some point today. It takes us hours to do the breakdowns but you can get a brief snapshot of the market in minutes by checking them out. While we do all the homework, we still want you to understand the why’s, how’s, and what if’s on how we see the market.
We have been long call options and stocks for much of 2014 and the majority of 2013 but we do have some insurance in case there is a severe pullback over the next 2 weeks. We are in the process of winding down our March trades from January and February and we will be in great shape to play the market’s next major move.
While it is still too early to “load-up” on our next batch of trades into April or May, we do see plenty of opportunities ahead. These trades will likely be short in nature as we will try to hit singles with near-term options and lock-in profits when we can.
If we had to close our eyes and guess where the market would be, we mentioned Monday morning weakness could lead to Dow 16,350; S&P 1,870; Nasdaq 4,325-4,300; and Russell 1,195. These are the first waves of support we mentioned to watch for this morning and today’s close will be important and could be a good tell on how the week unfolds.
With the indexes at or near all-time highs, short-term support can be shaky at best and longer-term price targets can seem out of reach. However, the chart work we do is the road map to our success as it keeps our emotions in check and avoids the traps of trading in a chopping or range bound market.
As we make the turn, the Dow is down 72 points to 16,380 while the S&P 500 is lower by 5 points to 1,872. The Nasdaq is off a 12-pack to 4,323 and the Russell 2000 is declining a point to 1,202. The S&P 500 Volatility Index ($VIX, 14.57, up 0.46) is testing 15. Remember, no flinching until 17.50 triggers.
We have a New Trade and we have raised our Stop Limits and Hard Stops on our current trades. We could have additional Trade Alerts into the closing bell stay so locked-and-loaded or follow us on Twitter to know the instant we are taking action. Subscribers, hit the Members Area for the updates.