Last week went exactly the way I thought. Early week low on Tuesday, lower than the previous week’s low, followed by a rally into the end of the week. The position of the market right now is the weekly is setting up a good buy opportunity, while the daily is now on a sell signal. Odds are this will resolve with another pullback, that alleviates the daily sell signal, while putting everything in position for a rally off the weekly bullish setup. I think somewhere in the area of 4250 in the SPX index is going to be a support level. In the bigger picture, from a practical point of view, this back and forth is difficult to trade unless you are using very, very short term options.
The short term option solution is a good one when it works, but when it doesn’t option time value disappears VERY QUICKLY. For this reason one has to be pretty sure to use these short term option contracts. I much prefer to go with options several weeks out. And for that we have to await another decline that sets up favorably for longs. So this week we watch the SPX 4250 area to possibly take on some long positions. Stocks I suggest you watch how they are trading include GOOG, MSFT, JPM, IBM, NFLX, META, UBER. An interesting one is ARKK. It needs a strong recovery through the resistance on the attached chart. It MUST be hard and fast, and if we get that there will likely be enough follow through to make money.