I trimmed my shorts from yesterday, but am still short the RUT, have some FAZ calls, and some FAZ stock. It looks like if this market is going to move down it needs to do it next week. The market has many divergences going on particularly the weakness in financials, however, divergences are not guarantees. As far [...]

As the market hits new highs, bullish sentiment is reaching extreme levels. A quick look at the SPX bullish percent index shows us to be significantly overbought. We have a lot of economic reporting this week, particularly relating to employment and manufacturing, along with the continuation of earnings[More...]

Taking a look at stock market action last week, we see price consolidating after breaking to new highs. Stocks are being bought even after rather poor earnings reports, and meanwhile there are a good number of stocks reporting legitimately positive quarters. Money is flowing into equities, and traders have a large number of earnings winners from which to choose. Looking at the SPY chart, price made a major move to new highs on 7/23, and then broke out again on 7/30. The last two days of the week saw some end-of-day weakness, which provides some reason for short-term caution. In any case, this is a bullish chart. <img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height:[More...]