Market Update:
Over the weekend, the FBI cleared Hillary in the latest email scandal and stocks rallied sharply from deeply oversold levels on Monday. We had no way of knowing that the FBI would announce that on Sunday. They could have very easily decided to do nothing or indict her and the market would have been down big on the news. Actively trading in this type of (guess the gap) environment is not fun and very erratic. If you are on the wrong side of a trade- you get burned. So please take your time, this chop-fest will pass and when it does we will be more than ready to get involved. We have done a great job of preserving both our mental and physical capital in this crummy environment. Trust me, I have seen horror stories. Even the big billion dollar fund managers are getting smacked around -and most are down big.
Stepping back, the market went from being egregiously oversold to a more neutral to slightly overbought level. Technically, the S&P 500 rallied off its 200 DMA line and rallied into its 50 DMA line (as of this writing). The Dow Industrials is above its 50 DMA line which bodes well for the bulls. Earlier today, the Nasdaq 100 briefly got above its 50 DMA line and then sold off a bit.
Next Level of Support & A Closer Look Under The Market’s Hood:
For now, Friday’s low is the next major level of support to watch. Steel (SLX) stocks and Transportation (IYT) stocks broke out on Monday and Transports immediately pulled back hard today. The financials (XLF) broke out today and semiconductors (SMH) are bouncing off the 50 DMA line. Otherwise, the action is less than stellar as most stocks are gapping down on earnings and many former leaders have been smacked on numbers. Today’s latest causalities are: $HTZ, $VRX, $CVS, $W, $DEPO, $TAST, and $DHI . Meanwhile, PCLN gapped up on earnings. It’s encouraging to see the bulls show up and defend the 200 DMA line for the S&P 500. Again, that level needs to hold going forward. If not, we are headed much lower. On the upside, the bulls need to see the major indices get back above their respective 50 DMA lines and it would be great to see a new batch of leaders emerge. If the market gaps down tomorrow (enter any reason you want), all bullish bets are off the table. If not, we have to expect this sloppy/sideways action to continue as the market tries to grind higher. Please take your time, patience is a virtue in this erratic environment.
FLS Portfolio:
Here’s a snapshot of the FLS portfolio as of this writing (3:22pm EST),
A. The service owns: SMH +17.20%,
B. The service will exit: SMH @ 65.96,
B. The service will exit: SMH @ 65.96,
Working Orders:
There are no working orders today
Disclaimer:
This analysis contains information from resources believed to be reliable but are not guaranteed as to accuracy or wholeness as of the date of this publication. Past performance is not necessarily indicative of future results. There is always a risk of loss in trading and investing. Opinions articulated are subject to change without notice. This analysis and any opinions expressed are intended for educational purposes only and should NOT BE interpreted as a call for engagement in any transaction involving the purchase or sale of any security or investment product or service. The risk of loss in investing and or trading can be substantial, and traders/investors should carefully consider the inherent risks of such an investment in light of their financial condition. The author, firm, associates, or the firm’s clients may have a position in any of the investments mentioned and their positions are subject to change without notice. Any reproduction or retransmission of any portion of this report without the express written consent of Sarhan Capital is strictly prohibited.
