Bears Pushing Next Waves of Support – Momentum Stock Options
MomentumOptionsTrading.com Morning Update for 8/8/2014
Bears Pushing Next Waves of Support
9:00 a.m. (EST)
The warnings signs that lower lows were in store continued to come on Thursday, and the bears used the final hour of trading to confirm them. The bulls made an opening run at resistance but went into defensive mode an hour later and ran for the hills into the close.
The Dow fell 75 points, or 0.5%, to settle at 16,368. The blue-chips made another run at resistance at 16,500-16,600 and reached 16,504 at the start of trading but tested my near-term downside zone of 16,350-16,200 after trading to a low of 16,333.
The S&P 500 declined 10 points, or 0.6%, to end at 1,909. The index tried to clear 1,930 and kissed 1,928.89 on the open but broke down like a rented mule after testing a low of 1,904. Support at 1,900 held but there is risk to 1,875 on continued weakness. Resistance is at 1,920-1,925 going forward.
The Nasdaq tanked 20 points, or 0.5%, to end at 4,335. Tech cleared 4,375 but failed to hit 4,400 for the fifth straight session while giving up the 4,350 level. This is a very bearish trend developing. I mentioned coming into the week that there was a good chance 4,300-4,200 could be tested by mid-August, and the bears are close.
The Russell 2000 was riddled for a six-pack, or 0.5%, and closed at 1,119.76. The small-caps opened higher and cleared resistance at 1,130 by reaching 1,131, but it was all downhill afterwards. The bears pushed 1,116, and I have warned that any dips below 1,110 will likely trigger 1,100-1,075. A close above 1,125 ahead of the weekend would be slightly bullish but hard to trust given the heightened saber-rattling.
The S&P Volatility Index ($VIX, 16.66, up 0.29) traded lower on the higher open and touched 15.44, but the bulls struggled to get below 15 for the sixth straight session. The bears are on the other end of the fight, as they have failed to get a close above 17.50. Yesterday’s peak was 17.25. This battle will likely be resolved by next week — or today.
While Wall Street worries over the geopolitical events and the growth rate of the economy, volatility will continue to sway market action. As option traders, it is the best time to make quick and fast profits, so don’t be nervous.
The talking heads and slick-talking pros can blame this or that for the pullback, but the chart work and warning signals have played out in spades.
It has been a busy week to say the least, but the time has flown by as the portfolio continues to shine. Today could also be busy. I have a few more trades for the portfolio if the market confirms another leg lower is coming. If so, look for New Trade Alerts (and possible Profit Alerts) between 10 a.m. – 11 a.m. If not, I will talk with everyone during Wall Street’s lunch break.
From desk to press, futures look like this: Dow (+15); S&P 500 (+4); Nasdaq 100 (+5).
Share this:
View original post here –
Bears Pushing Next Waves of Support – Momentum Stock Options
See which stocks are being affected by Social Media
