Happy weekend, everyone. I had a terrific trading week, and although I'm still concerned that we're between a rock and a hard place in the markets (in the middle, uncertain what is coming next), there's nothing I can do to change it, so I'm just doing the best I'm able.
The task before us is plain (again, not that we can do anything about it): push beneath the "shelf of support" ranging from 645 to 680. Do that, and it's an all-clear for the bears.
The problem is that you can look at the activity on the IWM and construct a bullish or a bearish argument out of it. One could take the past 60 days of the IWM and plausibly state that we've just done a retracement back to a cup with handle breakout, and it's ready to blast higher to new highs for 2008.
Yet one could take the exact same graph and say that the broad downtrend is still very much intact (the red line below shows resistance) and the brief rally has been broken, retraced, and has now failed (the green line).
I lightened up quite a bit on index holdings due to this uncertainty and am more weighted to sectors I think are more cleanly ripe for a fall, such as oil services.
I've mentioned Apple a few times (all of the following are stocks on which I own put options). The resistance level is super clean.
ACL seems to be wrapping up a nice topping pattern.
I've had ANF for a little while, and on Friday it finally started moving.
APA is a higher risk play, due to its strength, but any weakness in oil could make for a juicy 20 point drop (and thus a huge jump in the option value).
Ah, our old friend Chipotle is back. I haven't played this in a while, but I'm ready to rumble again.
I haven't done anything with GENZ in years, but I've got puts on this since the pattern is mildly interesting.
Lastly, CEPH really has me intrigued. The neckline isn't straight across, but that doesn't bother me. I have big hopes for this one!
We've got a new puppy in the house, so I'd better go romp some more. See you Monday.
