The NQ made a new year high yesterday. The cash NDX has been working off an overbought RSI, come off the bollinger band high and is not as stretched from the 8 day MA. The futures reached a short term profit target overnight. ( look at posted charts). Yesterday, the ES came around 5 points of the 2900 high which is tested so far overnight. Today, I will be seeing how the banks, smh and FANG act ,f we get toes/nq targets for a trading short. The key to contra trades has been taking them off into weakness when they look like more selling is coming. The long side I will enter when the 60 gets oversold and the selling in my tells seems to have dried up.
TELLS
IWM – back above 200 day. 159.5 is year high. A break of yesterdays low of 155.33 would be problematic for the market
Crude and XLE – crude has been holding the 64 area despite being overbought on the RSI and at the 61.8% area from last years high to December lows. XLE had a quiet inside day. So will it take out 67.71 and make a run at 68.25 or fail and break 66.87.
XLF – banks have been in a holding patter. 26.28 area as the low with 26.59 as the 200 day on the upside. Earnings will give the area a move either way.
SMH- semis have been near their high-of 112.90 with 114.55 as the all time high. The 110.5 area is good support.
XLK – the monster- made a new all time high at 76.40. There is support at 75.58.
IBB – had an inside day. I will be watching 114 and 112.30 for direction.
FLEXIBLE. entries and exits need to be good. DO NOT CHASE EITHER WAY..
BalsamTrades 