In last 3 trading days we pretty much reversed all the losses from Monday. Monday's high on SPY was 152.86, pretty much exactly where we topped out today. I was expecting some retracement from Monday's action but wasn't expecting a full 100% retracement. This bounce was primarily driven by Bernanke continuing to follow the line on QE, however the move higher so far had been on relatively low volume and Dollar has been flagging with no signs of weakness. Just to give you an idea here are daily volumes for this week -
Monday - 245M on huge selloff
Tuesday - 186M on bounce (about 75M was in first 2 hourly red candles)
Wednesday - 144M (about 30M in last 1/2 hr on downward pressure)
Thursday - ~75M until last hr, and then we saw another selloff with 42M shares.
As I mentioned in my previous post I was expecting sellers to come back into the market. There were signs of heavy selling in last hour yesterday and even heavier late in the day today which took out most of the days gains and some. We should see more weakness in coming days.
I unloaded all my longs, that I took for the tradable bounce, early in the morning session and watched the market continue higher. I started few positions during the day including GOOG short and VXX long. Financials look tired so may take a swing short position in GS or MS depending on the action. GS has a nice gap-fill level around 136 that could be take reached if the market heads lower.
Here are some charts and levels to watch --
Resistance - 152.86, 153.25, 154.65, 155.20
Support - 151.40, 150.45, 149.60, 149, 148.42, 147.25, 146.30, 146, 145.60, 144.50, 144, 143.06
Long - ARNA, MHP 1/2, BRKR (stop breakeven 17.40)
Short - RKUS (Holding from 20.60)
- GOOG short (entry 803.76)
- VXX long (entry 23.33)
- TDS short (entry at 23).
- BBRY (+0.60),
- HPQ (+0.50)
- MCP (loss 0.20)
Mix of long and short setups for tomorrow -
YHOO - setting up nicely. Could continue higher if the market holds up.
GMCR- Should retest pre-earning highs of 49.
MENT - tried to breakout today. Will watch closely next few days.
USO - Looking to go short here.
TTM - Below 26 could breakdown.