Will the Market Sail or Fail? SassyMusings 3/17/14

  • The key to surviving as a short term trader is adaptation. I came into this week with a more bearish bias as you can see here.
  • After today’s gap up that managed to hold firm the entire day, I am more neutral and ready for whatever comes next. SPX managed to trade over the 1850 level seen as resistance and close above it. The 12% drop in the VIX also singled a more risk-on stance among traders. Having said that, there are still some divergences to contend with. The IWM, representing a more speculative outlook toward the market, did close lower on the day. Furthermore, the bounce from many of the momentum growth stocks was meager and inconsistent with an overly bullish environment.
  • The Fed will begin their two day meeting tomorrow and deliver the outcome on Wednesday. The presumption among investors is that the tapering will continue with a further reduction of $10 billion worth of bond purchases and that no mention of rate hikes in the near term will be introduced. With that priced into the market any deviation from that outcome could create a volatile movement in either direction.
  • Levels to watch for are SPX remaining above 1850 and the reaction to 1868-1870 when and if it gets there. A rejection could equate to a period of consolidation or a further pullback, likely below the recent low of 1838.
  • And now for our momo’s:
    • AAPL just acting like AAPL.
    • I almost got stopped out of my NFLX puts, but managed to hang on.
    • TWTR still confusing the masses, but I do worry about a pin at 50 this week (see here for OI chart).
    • PCLN and FB both did an about face, but in opposite directions.
    • LNKD looks like it’s about to puke.
  • Chart/graph of the day: VIX got itself to drop just enough to expire tomorrow morning in the perfect spot.vix.3.17
  • Tweet of the DayScreen Shot 2014-03-17 at 8.48.45 PM
  • Oh and do me a favor and click here to bring traffic to my second article on TheStreet. Thanks, you’re the best :-).