Its finally getting interesting! 4-23-19 closing comments

With all the talk this year about the market being a dead cat bounce and returning to test the December lows is over. The SPX has closed at a new all time high with the intraday high just above at 2940ish. The NDX has been making new highs lately almost daily it seems. The IWM is catching up but still lagging. So now it gets interesting.. the bears are blown up… bulls are proven right so whats next.. this is why I say now its interesting. My thinking is that we get that panic buy are rush to new highs 3100 is my target, but along the way there are 1-2 day scares with increased volatility.

Its like the market has just showed its cards so we know whats ahead. Now, we need to take each set up as they happen and see where it takes us.

Hopefully, this leads to larger moves rather than this slow chop that we have been seeing.


So far today there market has completely capitulated to the upside. The SPX is right near the all time high of 2940. I have longer term targets of 3100, but as a trader its not that meaningful. The NDX is the clear winner as it is making new all time highs on daily basis it seems. The NDX is getting very overbought on daily with an RSI at 80 and at the bollinger band high. I will be expecting a very good contra trade set up in the NQ this week, but with FB and others reporting it might be from higher prices. The ES is just starting its move and with healthcare catching a bid I am less excited about any contra trade in there. The price action does suggest to me that we will have a melt up and I fully plan on participating if that occurs and definitely on the back side of that as well. This should be fun!

Morning thoughts and plan 4-23-19

Its always clearest new the highs and lows of a trend to follow that trend until it changes. It is clear that the trend is up and buying any pullback lately works like magic. This is a sign that everybody sees the same thing is obvious. As a trader we can make good money in this tape. Also, as trader we need to be aware that this type of action eventually leads to a great deal of selling or a top. There is no way of knowing, when, how or why. I am not a prophet.I can rely on my experience in doing this while knowing anything can happen,

So, I have been playing both sides in buying dips and selling extremes which has been working. Holding on to longs for more and taking smaller trades out on the short side. I will know when things changes as I am following the road map. This is the edge and flexibility in short term trading.

Today, I will be watching the SMH closely as it extended and possibly short NQ off of that. I came in long ES and NQ and have sold them out.


IWM – has been awful. Watching 154.52 low and see if it can back above 155.81. The weakness has not affected the moves in other indexes.

CL and XLE – crude prices reaches new year highs and remains bid. XLE broke above 68.4 and traded 68.66. Its right by the 200 day and the next point of reference is 70.36.

XLF – made a low of 27.17 yesterday. Lets see if it can challenge the pivot high of 27.46.

XLK – continues to march higher in an orderly fashion.

SMH- i posted this chart ads it looks extended and could be vulnerable to selling. There is an open gap at 115.87 with the 8 day below at 115.07ish. 118.33 is the high. I will be watching this closely for a signal.


When are the sellers going to give in?

The down open gets bought. NQ leads.. same story different day. The NQ took out its prior high of 7733.5 while the ES has been doing very little. Basically stuck between 2900-2923. My guess is that the ES will again test the high tomorrow – possibly through strength in the XLV and XLF. The IWM has been the obvious laggard but for now the market seems to be ignoring that. FANG and AAPL lead which I have been saying was needed. Earnings will set the stage for the next major move. The SMH took a break and energy XLE really took of getting above 68.4.

I will see how things set up in the morning for setups.