I think (and hope) the employment report is going to be good today. This might fire up a big rally that would kill the early bears (there are a lot of them) and offer a very low risk opportunity to sell.
I am ready to short any move at or above 1317 SPX, about 10 points above yesterday's close. As I said before, the highest the market can go short term is around 1320 SPX, with a high probability that it is going to touch that level.
Looking into the near future, I still expect negative surprises when it comes to the economic reports. I commented before on the expected path of retail sales and PMI. Here is another series that is near the top of its interval of variation and has already turned: the pace of change in real personal consumption expenditures on durable goods
The chart is from 1995 to today. I define the pace of change as the three month average of the monthly percent change.
For the ST Trading, my bias starting today is to short bigger rallies above the 7 h EMA, or after a strong close below it.
2 comments:
Good afternoon, Adi!
Thank you for your blog.
Very interesting to read your thoughts about the market.
Today, the market probably will not give a good short.
What are your thoughts on next week?
Will be able to stand in the short or the market will go up
up to 1320 -1340 ES?
Thank you in advance for your reply.
Respect to you.
Indeed Serge, probably no short opportunity as I expected.
I will wait until it comes to me. I still think the market is going to approach 1320 SPX. If not today, probably next week.
If it does not go up there but the put/call ratio is clearly overbought then I might risk by selling at lower levels.
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