S&P Falls Through 1290 But Still No Sign Of Panic

***Hi everyone, I apologize for the length of today’s analysis but I had spent time on a commentary which wordpress somehow lost during the draft preview! Therefore, here is the shortened version of my market analysis as I do not have what I previously wrote and do not have the time to re-write it all again. Once again I apologize for the inconvenience, wordpress has been changing the format from simple and effective to complicated and inefficient!

If you have questions about this analysis specifically, please direct them to my email address listed in the about me section. Sorry for the rant, but I am throughly upset.***

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The market sold off heavily which is unusual for a Monday after a big week to the downside. Volume was thin which suggests that we are in for a short term bounce as we are well oversold after 4 consecutive down days. The MACD histogram is at a 3 month low which means that we are very overextended on the sell side.

The best way to play a potential bounce here are the financials as they have lead the market lower in this selloff. XLF is down 6% and FAS is down nearly 17% from the highs last week that were put in on Tuesday. Meanwhile the market has only lost 4% so a skilled trader can easily snag a solid 2-6% on a bounce in the next 2-3 days if they know how to nail their intraday pivots.

Ultimately, after this bounce, I’d be looking to short the market with downside targets on the SPY of 127 and 125.75. If you want to play options, buy the July expiry as the June expiry is all but in the hands of the institutions now as we are only just over a week away from the 17th.

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About Aaron Basile
Market Technician, Equity/Commodity Trader, Austrian Economist, Contrarian Investor

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