Current Long Positions (stop-losses in parentheses): QCOM Oct 60 Calls, AAPL Sept 420 Calls, SPY Sept 124 Calls, DZZ (3.79), NFLX (202.99)

Current Short Positions (stop-losses in parentheses): None

BIAS: 7% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Durable Goods Orders (8:30am), FHFA House Price Index (10am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

  • Futures are about near breakeven, after the strong rally we saw yesterday off the 1120 level on the S&P.
  • Asian markets were down on average about 1.3% off of Moody’s Japan downgrade, while Europe traded about 0.5% higher. 
  • We broke through numerous short-term pricing levels yesterday, but the most important seemed to be the push through of the 10-day moving average at 1161. Though it didn’t last time this happened, usually we see at least a 1-2 day pop in equities, which would take us right into Bernanke’s Jackson Hole speech on Friday. 
  • Be aware of Fibonacci retracement levels on the S&P: 38.2%=1207, 50%=1233, 61.8%=1260.
  • A potential double bottom is in place off of the 1120 lows. A confirmed move could see it move as high as 1280. 
  • S&P is bouncing off of relatively heavy oversold conditions. 
  • 1120 on the S&P is quickly becoming what 1040 was for the bears last summer – a level that is unable to be broken through. 
  • Next resistance level to break through is the 1172, and after that it is the 20-day moving average at around 1193.
  • Gold looks to continue its sell-off after having a reversal type of day yesterday. 
  • S&P 3 points off of significant closing lows at 1120. Break it and we head for the 1101 market. After that you could see 1040.
  • My Conclusion: I believe we could see this market rally into Friday’s Jackson Hole speech, at that point, all bets are off on how the market reacts. 

Here Are The Actions I’m Taking:

  • Sold DZZ yesterday at $4.26 for a 9% gain, and bought NFLX at $212.83 – will look to get out on market strength today. 
  • I’ll be looking to play some over sold bounce plays.
  • Looking for a major bounce this week to try and get out of some of my SPY calls.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

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