akoptiontrader

So most of the day we traded in a pretty decent 10 point range on the ES. It looked to be mostly a blah day, and you could sense it early on. I was looking for a bit of a pop into the close, and instead we dropped like a cinder block. Normally this would be a very bearish sign, and it will likely be this time. However, I am likely to play the opposite of the first move tomorrow, depending on the internals and how things are lining up.

The charts still look like they are open to some up movement here before selling off, but perhaps we are breaking down faster than I have anticipated. We all know you drop much faster than you rise, so be on your toes. On to some charts:

Against what I thought, the VIX seems to be holding up here. Granted, this appears to be a very weak move the last two days, so it could easily drop, and I think it will, at least a little. But I also think this drop will be a reload for another spurt up.

Note the slightly lower v today. This really looked primed to me to have a little up movement before dropping. It doesn’t look like that so much anymore. But I still think we are going to see some buying, maybe not all day, but I think some buying would make sense for this chart, giving the drop more breathing room.

The SPX didn’t even make a move up into that down trend line. You can see how oversold it is, yet it continues to show extreme weakness. I still like this to move slightly up to sideways for a day or two.

The NAS was the only one that had the decency to rally into this steep down trend line. Ergo, it looks more bearish to me than the other two. We could have a conflicting day tomorrow. The NAS was the strong one today, but I think tomorrow it could be the weak one. It may go above this line, but I would be surprised if it closes above it.

I really like how the EUR/USD is setting up here for a short trade. I would be looking for a nice one day move down soon, maybe Wed. or Thur. We have a lot of data coming out those two days, with a slug on Thurs.

JPM took out that support we have watched and it dropped hard as I thought it would. I also thought some other financials would be drug down by it. Well GS, the usual leader, looks like it is ready to drop a little off of this bear flag.

C is another one. I will be watching the 3.12 area very closely. It really looks like it is going to give way soon, and if it does, I am going to be looking for the 2.60 range, percentage wise a very nice move.

TRV has filled that gap, but look at the RSI and today’s candle. It looks very weak to me. This support may hold, very short-term, but I think we are going to see this collapse soon, and I want to get some.

In closing: I was surprised by today’s end of day weakness, but moves like that also instill confidence that we may have truly formed a short-term top. I don’t think we have yet loaded up for a free fall and I expect at least a couple days of sideways to small up movement. We don’t have any big econ. news tomorrow, but Wed/ Thur should give us something to trade. We do have earnings tomorrow, with names like KO, TAP, AGU pre-mkt. so that could give us our intial direction, the one I am going to try and trade against. If it doesn’t set up, then I won’t do it. Trade well and prosper. AKOT