MomentumOptionsTrading.com Midday Update for 5/2/14
Bulls Failing in Breakout Attempt
We had a feeling today would be a make-or-break day for the bulls as we went over a number of clues we were looking for coming into today’s open.
Much of the indicators we follow were giving mixed to bearish signals but futures stayed green throughout the night and into the open. This gave us a good feeling Nonfarm Payrolls would come in swell but the bulls are failing to take advantage of the situation.
We have been doing a lot of early homework ahead of our normal weekend research as we have talked about the end of April and beginning of May being the focal point of a breakout or breakdown.
As we head into the final few hours of trading, the Dow is down 13 points to 16,545 while the S&P 500 is up a point to 1,884. The Nasdaq is advancing 5 points to 4,132 and the Russell 2000 is higher by 7 points to 1,133. The VIX has traded to a low of 12.83 and has held 13.50.
We have said in recent months picking a market top is never easy and that trading ranges can be the most difficult environments to make money in. However, the good news is if this another test to the top of the yearlong trading range and a pullback to the bottom, or new lows pursues, we can start to look for triple-digit gains on the stocks and indexes set to drop 5%-10%.
We would love to hangout and chat about all of the stocks and key indicators we are following but we have a lot to tidy up ahead of the weekend. We recently added some put protection in case the bulls fail on another attempt at a breakout to new all-time highs and our call positions are light.
We don’t want to get overzealous with the bears but we could see weakness into next week if the bulls can’t advance the flag and claim the hill today.
Subscribers, hit the Members Area for the updates and we could have additional updates into the close, and perhaps a New Trade.
If you do not hear from us before the closing bell, we will be back Sunday night with the Weekly Wrap and on Monday morning with the Daily along with all of the chart work. Until then, have a great weekend everyone!