- Yesterday’s rally managed to close above the open gap and we now have two significant open gaps below us as support reference points.
- We reached our first upside target on the S&P 500 yesterday near 1406. We’ve discussed this upside target since Monday. Next upside target is around 1420, although in the immediate term we may be a little overbought here.
- Any significant selloffs on daily charts would cause us to close our bucket 2 SPY long position and potentially flip short
- Exxon Mobil (XOM) along with the energy sector as a whole still looks to have upside
- On the other hand, implied volatility is low as indicated by the chart of the VIX below.
- The EUR/USD is still stuck in its three day range but any break below there may signal some weakness for equities while a break above the range may be good for more upside in equities.
- Overall it remains my best call of the year to only focus on intraday trading since late May. Markets have been choppy but not very volatile…rather the chop has come from large overnight gaps that often did not fill the same day.
- Trading is about understanding the current environment and applying the strategies that fit the environment. We will again have markets where swing trades work…its a matter of time
