Turbulent Tuesday

Well it was definitely a wild session of trading on Tuesday. Gapping down in the morning and then stabilizing before rocketing higher to almost the breakeven mark by the 220 reversal. However in the last hour the market just could not hold its rally and sold off from the 915 level to close just under the 900 mark. The last hour selloff does not inspire me to be bullish headng into Wed. I am seeing a slanted head and shoulders pattern on the 60min chart of the ES futures which could send us clear down to the 860 level as a conservative measurement. This pattern could be confirmed if we cannot break back over 915 this week. I would not be outright bullish on the market until we can clearly get back over the 930s with volume..and even then I'm only cautiously bullish.

The only bright spot today was the fact that GS actually rallied into the close and ended the day like 8 dollars off its lows. Unfortunately the market as a whole didnt catch on to that fact. I would continue to watch GS and C to see where the market could go. Lot of chatter about Citigroup in deal talks and GS in a heap of trouble. Dont listen to the rumors..just watch the price action and you should see the truth unfold. Stocks dont lie, but people do.

Otherwise, oil hit 58 smackers today and looks like it wants to go even lower Wed. after the inventory report so I would not touch anything oil related unless of course you are shorting :) Overall the volume was sort of light today again as I expected and we are really just stuck in a range here at 900. I think we could get a big move in the next few days, whether its up or down I dont know but I tend to have a bias to the downside at the moment. I'm liking SBUX here for a long trade possibly with a nice tightly defined risk/reward and perhaps a strangle trade on the SDS. I will go over these ideas in another post but those are my thoughts for now.