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The market was weak and hopeful but today it broke

I prepare my newsletter about the market outlook during the week and I wrote this yesterday:

So far, this market has shown weakness. But a few things may turn this around – 4Q earnings season and good retail sales reports that will propagate into the earnings results and estimates. If that doesn’t save us, nothing will, and we go down.

If down we go is what we will see, then there will be a few stops. The first stop can be at $4,720, and the second at $4,520 level (or nearby). That was a pretty good stop before, so I expect it to hold if we see this. If not, further down we go. However, there is no catalyst for such a selloff.

Yesterday, little I knew that today, the stock market wouldn’t like what FED said at today’s FOMC meeting. The market sold off hard and quickly cleared the $4,720 support.

Because of today’s selloff, I reversed some of the SPX put spreads into call spreads (Monday and Tuesday put spreads), and adjusted a few stock strangles to stay delta neutral. But it can bite:
 

SPX market selloff

 
If the market is retesting the previous resistance at $4720 and we bounce from here, all those adjustments may give us trouble.
 
 





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