The triple-digit moves continue as well as the back-and-forth action between the bulls and the bears as the major indexes flirt with support. It’s a little early to raise the bear flag as the the bulls are still on the pole but they are at half-staff. We have given specific targets on what levels to watch for on the charts and while those uptrend lines haven’t triggered, they could be getting close depending on today’s final numbers.
The current trading environment is sticky for the same reasons but there is are 2 NEW TRADES we like on today’s back draft, as wait for the rest of our April trades to finish up from earlier this year and last month.
It’s been easy to trust the bulls and their usually historic runs from November through April but we are at the point in time where traders like to sell in May and go away. The April is the new May call was wrong last week but that theory could be gaining traction if the indexes continue to take hits and support starts to crack.
We will only have 6 open trades going into May (including today’s) after this Friday and we have a few Weekly Wrap trades in play that could be called away so we will be in a great position to start the next batch of trades in full swing once we get confirmation which way the volatility will take the market. There are some trades we added to the Watch List this morning that have gotten nice pops on continued breakdowns as all of the possible new trades are put options so we have moved 2 of them up.
This Friday is also April option expiration so volatility could increase even further as traders try to peg strike prices close to their positions. Germany’s stock market had a “mini” crash this morning and it’s not too early to say SOME kind of flash crash is coming soon on an index or market either here at home or globally. There could also be that “blow-off top” to new historic highs before an ultimate 10% pullback into the summer months, so again, the water is choppy for trading.
As we head to press, the Dow is down 152 points to 14,604 while the S&P 500 is lower by 25 points to 1,549 (danger). The Nasdaq is declining 65 points to 3,198 (another warning sign).
We will cover the story stocks and earnings with a full report tomorrow but for now let’s get to the Members Area to take a closer look at what’s happening and the 2 NEW TRADES!