Looking forward to another fun week of trading. As of Sunday evening the futures are up 19 ES points which, if it holds, will produce a sizable gap up in the morning. I would guess that we have at least some sort of attempt at a pullback in the morning and from there maybe we can rally higher. We are really at an interesting point on the charts starting out the week. We closed last week just underneath the 20 day MA on the SPX and after the two day selloff we find ourselves right back to about the midpoint of the most recent advance the past two weeks. This is a retracement level that should be watched for a market rally. If last Friday's move holds we can easily this this market rip higher in the short term. I'm still thinking this market will see choppy volatile moves the next few months but for this week I would be bullish above the 960 level.
Very light week on economic data with Thursday seeing Initial Claims and trade balance and treasury budget. Friday we will see Retail Sales, Business Inventories, and Michigan Sentiment. Earnings are winding down but this week the big one to watch for will be WMT on Thursday before the open.
The VIX came up to its 20 day MA last week and failed almost perfectly to make what looks like a lower high. This is a good sign and probably will lead to lower options prices the next few weeks but I do not think we are going below 40 for some time still.
Buy the Dips in these names: AAPL, HBAN, EBS, APOL, KR, NDN, UUP, AMGN, DAL
Sell the Rips in these names: FXE, AEM, LEN, MFC, TS, TM, RKT, USO, MTZ
Other than that I dont really have many more thoughts. It should be easier to see if the market wants to stay above 960 and rally after Mondays session. Whatever happens dont get too excited because we are still in a bear market and rallies are made to be sold, but nonetheless we could see a decent sized pop in the coming days so why not take advantage of the long side while its here.