$SPY Today I closed out the three positions which
were referenced on Saturday $SAVE, $SM and $TRN. All three had been downgraded to Avoid and I
saw no reason to hold on in today’s session.
More and more, small caps are getting attention
from investors. All the media talks about today’s morning reversal blamed the
small caps. It is true that small caps are weak. The Russell 2000 has spent a
dozen sessions beneath its 10-day moving average. The large caps are weak too.
Both the DJIA and the S&P 500 could not reclaim their 50-day moving averages
even after last Friday’s big rally.
As discussed previously, stocks are in a
make-or-break juncture as they wait on the start of the third quarter earnings
season. The FOMC will meet again near the end of the month. Suffice it to say
the combination of these two scenarios will make the rest of October a choppy
one. Remain cautious.
In addition to the sales mentioned above I traded
the SPY 141122Put198 today. The trade
was triggered at 10:14 AM when the trend indicator alert on the underlying was
triggered. The order for 38 contracts
was filled at $3.93. The range was then established
and the trade closed around 11:40 AM at $4.40 when the daily target was hit.
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