ST Trading: Covered at 1304

ST Trading: Long at 1308

Weakness In Consumption; Buy the SPX

The pace of change of real personal expenditures on durable goods slows down as expected:

The stock market does not acknowledge this yet, but I expect it to do so in the following months. Still, I think the recent weakness is a short term buy. The prospect of a good employment report may pull the averages higher. The put/call ratio also favors the scenario of a rally:

I think the highs at 1340 will be reached soon.

ST Trading; Out at 1305.75

I was looking for a strong close. I still expect the market to rally for the rest of the week. I will try to go long again tomorrow.

Zig Zag

I am looking for this pattern to play out:

ST Trading: Long at 1308.5

Market Outlook

Big divergences in the 5 day EMA of the put/call ratio usually precede important corrections:

I think the next good opportunity to sell will be after a spike in the simple put/call ratio. Something like this:

Meanwhile, today I expect a steep drop, followed in the next days by more upside. The employment report may coincide with an inflection point.