Current Long Positions (stop-losses in parentheses): SPY August 136 Calls, SCLN (6.09), TSYS (5.08), ABAT (0.94), MDF (4.66), SIFY (5.60)

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

BIAS: 20% Long

Economic Reports Due Out (Times are EST): Treasury International Capital (9am), Housing Market Index (10am)

My Observations and What to Expect:

  • Futures are about 1% lower.
  • Asia was mixed and flat in trading, but Europe is down over 1% across the board.
  • Stocks on Friday, managed to rally nicely off of the day’s lows, and close near the highs of the day to form a bullish piercing pattern on the previous two candles on the daily S&P chart. 
  • The 20-day moving average has acted yet again as a support level for the S&P for the second straight day, and with the early morning weakness we are currently experiencing, we are poised to test the 20-day MA again at the open. 
  • A break of last week’s lows and the 20-day moving average could lead the market to test the 200-day moving average in the short-term. 
  • Last week’s lows represent the 50% Fibonacci Retracement on the S&P at 1307 as well. 
  • Volume was much higher on Friday, mainly due to it being Options Expiration. 
  • On the weekly chart, the candles formed over the last 3 weeks represented an evening star pattern, which is indeed bearish. 
  • Market is heavily oversold in the Short-term, which could hamper the ability of the market to see further downside going forward. 
  • Earnings season will see a wide range of major companies reporting this week, including Apple (AAPL) 
  • Potential Head and Shoulders pattern forming on the S&P.
  • My Conclusion: Today’s weakness heading into the market will make it difficult for the bulls to do much of anything. Watch to see if we stay below the 20-day moving average in the first hour of trading, if not, there’s a good chance that we’ve established the day’s lows.

Here Are The Actions I Will Be Taking:

  • On Friday, sold TSYS at $5.16 for a 1.5% loss, Sold AONE at $5.62 for a 0.9% gain.
  • Bought MDF at $4.85, and SIFY at $5.80. Both of which are sporting nice gains right now. 
  • Continue to hold SPY August 136 Calls
  • Will continue to day-trade the market with my focus being on small-cap stocks.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).