MomentumOptionsTrading.com Midday Update for 7/7/2014
Get Ready for 2Q Earnings/ Profit Alert (FTNT, IMAX)
The bears are working on their third-straight Monday win and are making more noise than the prior two. The bulls are holding near-term support but all signs are pointing towards a volatile July.
With 2Q earnings season kicking off tomorrow, there were a few clues I said to watch for today to get a feel for how the week might play out.
The first was how the blue-chips performed. The Dow is doing a back test to 17,000 but I mentioned a triple-digit loss could be a warning sign. Today’s low has checked-in at 16,993 and represented a 75-point clip. The good news is the bulls nearly made it back to even the prior two Monday’s ahead of the close.
The other important indicator I’m watching today is the S&P 500 Volatility Index ($VIX, 11.40, up 1.08). The VIX is up 10% but is holding 11.50. A close above this level would suggest 12.50 comes into play and a continued pullback to support for the major indexes. I have mentioned the bulls have wiggle room up to 12.50 but a close below 11.50 would suggest a continued rally despite today’s double-digit percentage pop.
Heading into the second half of trading, the Dow is down 53 points to 17,015 while the S&P 500 is lower by 8 points to 1,977. The Nasdaq is declining 31 points to 4,454 and the Russell 2000 is tanking 16 points to 1,191.
Subscribers, check the. Members Area for the current updates as there are two trades that I’m closing.