Last week's market action was weak, as displayed by bearish engulfing candlesticks on the weekly charts of major U.S. indices. The Russell 2000 is despite choppy action very close to again making lower lows since the beginning of May and the SPX and NDX look very much the same.
This morning I am reading several articles on bearish views on Silver…i.e, shorting silver now seems to be on many people's mind again. I turn cautious on the short side when I see such complacency, although I also see the potential for silver to head lower. For my taste however I like to wait for a clear candlestick pattern that would give us the 'sell' signal. It is of course not garanteed that we get such a signal.
Today's U.S. economic calendar is light with no major numbers scheduled to be released.
Our plan for the day is to take advantage of some intraday patterns in the S&P500 futures for cash flow and for the bigger picture we will keep a close eye on the financials (still thinking there is bounce or at the very least outperformance potential).
One strategy that has worked very well for us this year is the selling of far out of the money calls on stocks that have fallen at least 10% in any given day. Check out our trading plan if you want to learn this strategy.