MomentumOptionsTrading.com Midday Update for 7/10/2014
Bears Push Fresh Lows/ New Trade (FAST)
He said, “Son, I’ve made my life
Out of readin’ people’s faces
Knowin’ what the cards were
By the way they held their eyes
So if you don’t mind my sayin’
I can see you’re out of aces
For a taste of your whiskey
I’ll give you some advice”
So I handed him my bottle
And he drank down my last swallow
Then he bummed a cigarette
And asked me for a light
And the night got deathly quiet
And his faced lost all expression
He said, “If you’re gonna play the game, boy
You gotta learn to play it right
I normally wait until Friday’s to spin an office classic ahead of Wall Street’s open but today I felt the need to reach back in the archives to keep my emotions in check…
You’ve got to know when to hold ‘em
Know when to fold ‘em
Know when to walk away
Know when to run
You never count your money
When you’re sittin’ at the table
There’ll be time enough for countin’
When the dealin’s done
Futures were showing a slightly lower open when I hit the rack last night but got progressively worse ahead of this morning’s open. There are a number of events that are worrying the suit-and-ties and in a short sentence they are blaming Portugal for today’s pullback.
The country missed an interest payment and the talk of default was the water-cooler chatter that helped the bears push fresh lows for the week on the open. Of course, the bulls have rebuffed those claims and have rebounded off the lows but they still have work to do.
One thing for certain, volatility has picked up but the clues Kenny and I are giving you should help you in navigating today’s pullback.
The indexes pushed my December fluff targets ahead of the July 4th holiday and while I have penciled-in higher highs, it all depends on if near-term support holds – and the VIX.
Tomorrow and next week will play a major role in possibly determining the new trend, or a continued trend higher. The Financial stocks will be in focus, starting with Well Fargo’s (WFC, $51.81, down $0.38) earnings ahead of tomorrow’s open. Next week will feature a number of heavy-hitters in the industry.
I have talked about the Financials needing to lead the market to new highs and they performed well in the second quarter. The question is can they keep the momentum going as Wall Street isn’t expecting much from the sector.
The suit-and-ties have been wrong on a number of calls this year so perhaps the banks surprise to the upside.
The good news is the Daily portfolio is very light and there is room to add a bevy of new trades over the next few weeks. It is still too early to load up and go all-in until the market shows me a few more cards but I do have a New Trade for today.
Heading into the second half of trading of trading, the Dow is down 75 points to 16,909 while the S&P 500 is declining 7 points to 1,965. The Nasdaq is lower by 16 points to 4,402 and the Russell 2000 is getting pounded for 12 points and is at 1,161. The VIX is up 0.62 to 12.27.
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