• so we're having a 'frustrating' funny trading morning…the tape feels tired after a week of vertical leaps yet somehow is still holding its composure.
  • we reiterate that immediate-term risk assets including equities are overbought.  We are looking for that retracement to somewhere around 1230ish or so where we would start looking to add some longs.
  • what would we add at that point if things smell right? some SPY, CAT, and something with a little more volatility like a beta chaser name of some sort.
  • note the downtrend line that the SPX has come into and how we tickled the 200 simple moving average (red moving average line) this morning.  Some resistance is to be expected here, at least for a couple of days or so.
  • note however on the daily chart that the stochastics are nowhere near overbought on the daily chart so after a little breather stocks could have solid further upside potential. 
  • how far?  1300  –  1340 is a lofty but possible level we could see before things start turning nastier again.
  • in the meantime please keep watching the dollar index, which will serve as our clue for overbought, oversold, and just about any other levels to watch for as it relates to equities.

 

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