Sunday, November 8, 2009

Weekly Watchlist 11/9

Neutral. That is my current read on the markets going into the week. We got a nice rally off 1030 last week and now we have the 1075-1080 resistance standing in our way on the SPX. Indicators seem to be showing us bullish signs and sentiment got much too negative on that last little correction off of 1100. The percentage of bears as calculated by several important weekly surveys was as pessimistic as they were at the March bottom! That says alot on the current opinions of all market participants and says that we do have fuel to the upside if the market wants to go with it.

After the jobs report its hard to see what the bears have for their case to push this market lower going into a seasonal strong period for stocks. At the same time what could be the catalyst to send us thru 1100 on a new rally? Other than the overall momentum of the uptrend that began in March it is hard to see many events that give us a meaningful move in either direction going forward. Earnings are winding down and the fed meeting has passed. Which is why I think we have a very good shot at seeing a nice trading range develop between roughly 1020-1100 SPX into the next month or so.

Selling iron condors and other theta positive option strategies could be the ticket to profits as well as taking quick profits on directional moves that get overextended short term. If a new trend develops we will go with it but for now I think it is right to take quick profits and expect some churn and burn.

Econ data and earnings for the week 


Buy the Dips>> TGT, WLT, MA, CL, ICE,  NFLX, PRGO

Sell the Rips>> STI, MET, FAST, VMC