Yesterday may have been the best LIVE STREAM launch for an Options Trading group in history. Granted we have a few kinks to work out still (my language to start with), the feedback I received from those who were able to take LIVE NEWS & LIVE TRADE ALERTS was stellar.
We literally caught the NASDAQ TECH DROP within a minute of it happening just after 11:30AM and the moves were stellar! More than 14 of the tickers we follow, track and trade regularly produced tradeable gains from between 500% – 3000% in that 2-HOUR flush down & then more on top for those bounce players.
With GDP Numbers due out at 8:30AM this morning, we’ll be looking forward to seeing how that, coupled with President Trump’s failure to get his own party in line to repeal Obamacare posting doubts that his 1-Page Tax Reform from March will have the same problems.
SPX & the ‘Dow Theory’
There are six main components to the Dow theory:
- The market discounts everything
- There are three kinds of market trends
- Primary trends have three phases
- Indices must confirm each other
- Volume must confirm the trend
- Trends persist until a clear reversal occurs
Yesterday, the DOW Transports gapped down at the open and were down about -2% while all four major indices remained positive (#4). Around 12:30, the Transports broke even lower and the Nasdaq started to selloff (#5). The SPX/DOW followed, but soon after the SPX hit 2460 an hour or so later, the market rebounded for the rest of the day to close at SPX 2475 (#6).
Remember 3 weeks ago when we had confirmation of a downtrend from 3 of the 4 major indices and were simply waiting for the DOW to confirm it? Well while the Nasdaq, SPX & Russell 200 all broke WELL BELOW yesterday’s S2 pivot, the DOW refused to even break below yesterday’s R2 pivot.
Unfortunately, the waves are still inconclusive at this time.
The very short-term count now has five waves up then a decline to 2460, while the short-term count has three waves up and possibly a 4th to 2460.
In other words this uptrend can still go either way: B wave or Minute iii wave.
Short term support is at the 2456 and 2444 pivots with resistance at the 2479 and 2525 pivots
The reaction to the GDP numbers due out this morning and how strong the DOW can continue to be will be the deciding factor as to if there are plays on SPY/SPX or if its best suited to keep things as is: focused on individual stocks that have all reported their earnings already.
As I mentioned weeks back and many times in the chat room:
The markets tend to have a pullback after FB reports its earnings – precisely what we took part in yesterday. Now that AMZN has reported, the few remaining bigger names (AAPL, BABA, NVDA) wont be much of a factor since its MSFT, GOOGL/GOOG, FB, AMZN & AAPL that this entire market has been propped up with over this 18 month extended period.
Major OIL Companies report earnings this morning and Crude is at a 1-Month high.
Will be interesting how they end this week/month and we’re going to be ready whichever way they swing today.
Looking For (top – bottom):
- AMZN 980 – 1020
- FB 171 – 165
- NFLX 185 – 180
- BIDU 214 – 197.80
- TSLA 342 – 327
- NVDA 164 – 158
- SPY 248 – 246