This morning we have initial jobless claims at 8:30 ET and the Leading Indicators at 10:00 ET. I have a summary of economic and earnings reports for the week in my Sunday night post.
Yesterday opened down but then reversed a bit as expected. I mentioned yesterday that I saw divergences between price on the $TRIN and $TICK. Into the close we had a double bottom which looked promising for today but that pattern has failed. The overnight range on the ES is currently 1097-1109 but we have the jobless claims in about 30 minutes which will likely shake this up.
One pretty good setup right here is a bet on upside volatility. VXX is trading right at its low for the year and an upside bet can be made with a tight stop. I say this with the caveat that the 50-day SMA is squeezing this against the low for the year in a descending triangle formation. But, the only real risk of taking an upside bet right at the bottom is a big gap down. No trade is perfect. I’m just throwing ideas out there.
I still think the bounce on UDN off the 50-day up to the trendline could be a “kiss of death.” If this were to play out, it likely means lower equities. Keep an eye on the currency charts I posted yesterday.
Keep an eye on natural gas. The bounce trade seemed way to obvious and it appears to have failed. I’m watching for an entry on UNG in the $8.40s. This would be an entry off the lower Bollinger Band and RSI should be under 30 at that point as well. Note that UNG is one of the few commodities that seems to do its own thing. So even though I’m expecting a Dollar bounce soon, I think UNG could have some upside even with a stronger Dollar.
I’m also watching IWM to see whether it can join the other major indexes to make a new high or whether the weakness in the small caps is an indicator of market weakness. I’m also watching market leaders in my 52-week high club such as AAPL, BLK, IBM, BIDU to see if any of them can breakout. So far, that group seems to be stalling out.
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chartsandcoffee
