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I am still going to hold my SDS. The bearish divergences are only getting more dramatic and the low volume new high in the S&P 500 can be deceiving. I will give my SDS just a little more room and drop my stop down to $8.45 from $8.50. It’ll allow me to still keep a roughly 1.1% profit over both my SDS trades here on Telegram (the one I closed earlier this week and the current one I have open) if I were to get stopped out.

If I am not stopped out, it might give me just the room I need to allow for the turn here in the S&P. If this is it for my trade updates here on Friday, I hope you have a great weekend and I will see you back on Monday! Good luck in your trades!

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Key Algorithm Calculated S&P 500 Support Levels:  4360 (SMALL) / 4350 (SMALL) / 4300 (SMALL) / 4250 (MEDIUM) / 4240 (MEDIUM) / 4220 (LARGE) / 4200 (MEDIUM)

Key Algorithm Calculated S&P 500 Resistance Levels:  4380 (MEDIUM)

Assessment: We sold off hard on decent volume and have recovered on dwindling volume each of the last three days. Today looks to be another low volume day where we move up. I will continue holding my SDS position, for now. I would like to see how today goes. We are heading back to the all-time high in the S&P, but it is setting up for more bearish divergences in the technicals. So, can you buy into the bullish move? It’s tough because while the market is moving up, we have that continued disconnect. It is a small basket of stocks pushing up the indices and giving the perception that we have a healthy bullish market. However, under the hood, the small caps have struggled the past few days. It’s a disconnected and ugly market. Best thing for me to do is play light, dip my toe in with a position here or there, but wait for a cleaner picture. Good luck in your trades!

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Another day where the S&P is carried higher by a small basket of stocks. If you look under the hood, you can see it in the Russell 2000. In the R2K, you are down -1.38%, but in the DOW, S&P and NASDAQ you are up 0.0%, 0.06% and 0.43% respectively. It’s not good for the technical picture. We’ll see if it leads to the same collapse as on Monday. Good luck in your trades!

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Key Algorithm Calculated S&P 500 Support Levels:  4360 (SMALL) / 4320 (SMALL) / 4300 (SMALL) / 4250 (MEDIUM) / 4240 (MEDIUM) / 4220 (LARGE) / 4200 (MEDIUM)

Key Algorithm Calculated S&P 500 Resistance Levels:  4380 (MEDIUM) / 4360 (SMALL)

Assessment: We are back over the trendline, but it was not exactly a convincing move. We had an aggressive decline and then two days pushing it back up again. Now we have to see today if the bulls run out of momentum or if the trendline holds and we go higher.

The earnings out yesterday, good and bad, both seemed to lead to selling. Not a good sign. It typically means good earnings are baked into the cake, so there is no real upside catalyst potential in earnings. It could be why we have yet to see any unusual options activity around earnings like we normally do in the FMA each quarter.

The market internals have greatly improved, and the regaining of the trendline puts the ball in the bull’s corner. However, volume on Monday was just below the COMBINED volume between Tuesday and Wednesday. So, the lack of volume shows a lack of conviction on the move. It’s not bad volume, but it is hardly bulls pushing their way back into the market. The SPY is at resistance, let’s see what she does with it today and make some decisions. I am holding my SDS position…for now. Good luck in your trades!

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Key Algorithm Calculated S&P 500 Support Levels:  4360 (SMALL) / 4300 (SMALL) / 4250 (MEDIUM) / 4240 (MEDIUM) / 4220 (LARGE) / 4200 (MEDIUM)

Key Algorithm Calculated S&P 500 Resistance Levels:  4380 (MEDIUM) / 4355 (SMALL) / 4320 (SMALL)

Assessment: Well, so far things played out as expected. We had a drop, gap fill and now the final part of the plan is a much stronger leg down. Will we get it?!?!? That is the question today. I am just going to watch the price action and keep my SDS on a short leash in case I only got two of out three moves right, and not all three. Let’s see what the day brings us! Good luck in your trades!

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I got the bounce I expected to fill the gap from the previous day’s sell-off. I am going to use the move to re-enter my SDS position here at $8.87. My stop is set to $8.50 and my target is $9.45. Good luck in your trades!

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Key Algorithm Calculated S&P 500 Support Levels:  4250 (MEDIUM) / 4240 (MEDIUM) / 4220 (LARGE) / 4200 (MEDIUM)

Key Algorithm Calculated S&P 500 Resistance Levels:  4380 (MEDIUM) / 4360 (SMALL) / 4300 (SMALL) / 4300 (SMALL)

Assessment: The market is short term oversold. So a bounce would be expected. However, market crashes typically occur when the market is oversold. The market is oversold, people expect a bounce, when one doesn’t happen then panic sets in and everyone runs for the exits. Obviously that is a possibility, but crashes are not frequent occurrences. I closed my SDS and a bearish position in the FMA because the S&P seemed to find support at 4235 and then regained 4250. Those would be the key levels to watch today. As I discussed yesterday afternoon, I would love to see a gap fill bounce and then for the market to tank once again. I think that second leg of selling would be more aggressive as people realize the market isn’t going to regain the uptrend. Let’s see what today brings. If we get a bounce, I will be looking to short the bounce (pending the technicals and algorithm assessment of the bounce). Good luck in your trades!

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The market looks poised for a bounce back up, perhaps as high as the trendline off the March 2020 low. If it gets to this level or has a material bounce, I will be looking to short a few positions I have on my list. It’s all about COVID again. If anything were to come up to show the vaccines are not working, this market will drop like a rock. So far, thankfully, that is not showing up. However, we are well overdue for selling and perhaps a market correction. So, what we could be seeing is simply a healthy correction in the market. Or it could be something more. When the market tanked in 2008, the beginning selling wasn’t done in September when Lehman went bankrupt. If you look back at charts, it began in June 2008, and long before anyone was really paying attention. So, while we look to the fall as seasonally weak, sometimes the first wave of selling happens in the summer to hint at what will happen in the fall.

My best scenario would be a pop to the March 2020 trendline (around 4350-4370) in the near term, followed by a struggle to regain the trendline and then the market tanks into the end of the year. Will this play out? Who knows, but the gap down today and the power of that trendline has it as a decent possibility. At a minimum I would like to short the gap fill in the S&P if we get it. Let’s see what tomorrow brings! Have a great night!

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I am going to close my SDS here at $9.24. It will result in an ROI of +5.8%.

S&P is building a base of support. It could collapse through but I would expect some minor bounce. I can always enter this trade again at a lower price if the bounce occurs. Worst case I lock up a nice ROI in less than a week. Good luck in your trades!

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Key Algorithm Calculated S&P 500 Support Levels:  4320 (SMALL) / 4300 (SMALL) / 4250 (MEDIUM) / 4240 (MEDIUM) / 4220 (LARGE) / 4200 (MEDIUM)

Key Algorithm Calculated S&P 500 Resistance Levels:  4370 (MEDIUM) / 4350 (SMALL) / 4340 (MEDIUM)

Assessment: Well, pretty easy assessment for today, looks like the market is going to tank at the open. We will have to wait and see what happens because futures can be deceiving and reversed when real trading opens. However, assuming it holds, it will be a solid move for my SDS position I opened here on Telegram. So, no real strategy this morning. I am going to sit back for the first few hours of Monday (as I usually do anyway for Mondays) and see what happens. I am positioned well for this move today in the FMA and moved to hedge last week. So, I do hope this is a strong down week. It would then setup some buying opportunities! We will have to see how deep this selling gets. Long story short, for now I am just sitting back and watching. Good luck in your trades!