By: Scott Redler
If you sold the majority of your macro longs when the uptrend broke at 1178-1182 you were not at risk when the market had its “Wild Ride”. If you covered your shorts Friday going into the weekend after a 10% move lower in the Nasdaq and the biggest down week in years you’re not caught short into this huge gap up. All you need is a sound set of rules and you will limit the amount of disasters you have to trade through!
S&P’s are opening near big resistance, and that 1160-1170 area should be a very tough area to trade the next few days. I went against conventional wisdom and bought Friday (small), and I already sold 80% of my longs pre-market thinking the size of the up open is a gift. Let the first hour settle out before you decide on any new trades.
TECH
Most tech stocks are opening right where they broke down from.
AAPL has big resistance now in 250-258 area. I would not be buying this gap open, but let it sift out.
BIDU is similar to AAPL, as it filled the earnings gap and now is opening near 670-680 resistance.
GOOG is still a weak stock. It’s break down point was 520-525, which is now new resistance.
AMZN was also one of the first former leaders to break down. I will look to fade the 131-134.
Most of all tech has the same story, as they got beaten down and are now opening back where they broke down from.
BANKS
GS still has a ton of headlines and it’s up with futures. Resistance is 149-152.
JPM- I’ve been trying to catch a bounce here. I do own some and resistance is 42.50-43.50.
BAC held the old deal price of 16ish, and is now bouncing.
CASINOS
They had a great run and started to correct with the market.
WYNN had a great move for us. Now it’s just a choppy trade long and short with 83-86 resistance for now.
LVS is a great to trade while trending, but now it‘s very choppy. 23-24 is resistance.
Gold– I went out long only 50% of my position selling into strength, and I will look to buy some back again if we can see 116-116.50.
Bottom line
The market is still in a correction for now. There will be oversold bounces along the way. DO NOT PLAY THE EXTREMES AND CHASE MOVES. The market had historic oversold readings on Friday, so it made sense to take profits from shorts and shift gears. It was the same thing during the uptrend. You don’t chase and buy Stocks at new highs after parabolic moves. You must have proper entry and exit strategies in this market as you put together your trading strategies.
