Well I have been waiting for a day like this for a long time, and I took advantage of it; not full advantage, but most of the advantage. We broke through some major support that I had been writing about for months, and we broke through convincingly. We even took out some secondary support that was nearby. We have more news coming out tomorrow, but I am banking that wte may already be baked in to this news. If you noticed on Wed., we had nice v into the selling and then steady low v with the buying. Today, we had selling early, and then another attempt at buying, and I was nervous as I sat on my profitable puts, that we would have the same thing that occurred on Wed. However, every rally was beat down quickly. We even sold strong right into the close, which went against my plan of buying some SPY calls at the close, but I did anyway. I just have a sneaky suspicion we may see a reactionary bounce in the morning, and if so, I will be selling right away. The move into the close was so powerful, that my limit order got filled and immediately dropped about .04, hate that.
Things are making a little more sense than they did a few short months ago. The VIX rallied right through resistance, which is consistent with a 200+ point down day. Now to see if it will hold here, or drop again for another rally. Currently, it looks very strong with lots of support beneath it.
The DOW broke down hard. You can see my support level at 9623 held yesterday, and was the bottom. We are again getting close to support near 9400, drop in the bucket of 100 points.
If you recall, I have been bloviating about how I thought the NAS would lead this move down, hence me playing the QQQQ the last few times, including this week. The NAS broke through both up trend lines, the aggressive and conservative one. I see some good support in the range of 2014 to 2025, I know not very tight, but it is a sloppy chart. This chart looks like one of those that could reach up and re-test the bottom of the broken trend line quickly, and then sell off some more.
So I went with calls right at the close on the SPY, after selling all my put positions today. Why? Well you can see we ended up on the SPX right on my red down trend line, and especially after a move like today, I would expect a little bounce, and this chart looked the bounciest to me. This is a risky trade in this environment, but I have seen this happen often, so I took a small position to see if I could catch some of it. Honestly, I will probably end up back in puts sometime tomorrow, maybe again near the close.
Same chart a little closer so that you could see to what I was referring.
The RUT is sitting on some support from that last consolidation. I am not sure how strong it will be, but it held up the SPX yesterday, so it may do the same here tomorrow.
Readers will know that I put a lot of bearish charts on here. I prefer to play down rather than up. The breaks are quicker, the moves are cleaner and I am playing against my own retirement accounts etc., so I feel like I am hedging. I am just bent that way. But I still like to play to the upside when I can, so here is one to watch. SHLD held on support on huge down day, if it holds tomorrow, could be a good long opportunity, but there is resistance very close by so be wary of it.
PBY is similar, it found support on the trend line after breaking support. I think this one might hold, even though it crushed the 20 ma today in its down move. But if it breaks, then we are looking for $8.40, a good percentage move.
CBL was up today! You can’t say that about to many stocks. So here is my conundrum, it could not break through that resistance, yet it finished positive. If this was a normal trading day, I would be watching for a drop here, but today was not normal. I still think the resistance will hold and it will drop. A move above $9.90 and I wrong.
BAC is a hotly traded stock, and I usually don’t talk much about hotly traded stocks just cuz everyone else does that. I like to find hidden gems. However, this is tough to ignore. I think this is a serious breakdown of support, both via trend and via 20 ma. Further, I really don’t see any natural support levels until we get near$14, that is a huge percentage move. I will be watching for follow thru to the down side to see if I can profit on this one.
Simple chart, a nice bearish engulfing candle near some support. I could see this heading to support and then watching for break of it to the $70 where the 200 ma comes into play.
Finally, my favorite type of play the re-test of the trend / support line. This one is a beaut because it closed beneath the 200 ma as well. I would wait for a break beneath $29.90 with good v. The v has been increasing into this down move, and I think we may see anew low soon.
In closing: The charts still look bearish, but of the 100 or so I looked through tonight, I saw several with support nearby. I am expecting a morning bounce, news depending, and maybe even a little up day on low v tomorrow. If I see that, I will be very tempted to buy puts on one of the above charts tomorrow, depending on their action. Trade well and prosper and look for more charts on TWITTER @ akoptiontrader. AKOT
