Good morning trading world, we walked right to the edge of the cliff and hung our foot over and laughed at volatility. I am still telling you that we still have not seen real angry sell side activity in the market yet but its close we may wake up to it on Monday, you never know so you just have to be prepared. Next week is going to be really crazy with all the earnings coming out. I can see a big bounce coming in the mid to late trading session and it’s going to be a good time to reup on the short positions.
Next week about 50% of the notional value in the S&P 500 has earnings. Monday VZ, Tuesday V, Tsla, PEP, GE and NEE. Wednesday: META, TMO, IBM, NOW, LRCX, and BA. Thursday: MSFT, AMZN, CAT, and INTC. Friday: XOM, CVX, CL and PSX. So I am sure the volatility will get us movement like we haven’t seen in a while and get vol to bust over 25 or better. Got a few vol spreads in place for that. Get ready.
Jack support is 5025, queen support is 5016 and king support area is 5003 down to 4993. Jack resistance is 5108, queen resistance is 5116 and king resistance is 5130 up to 5139. The important battle area or no man’s land to hold is 5050-5025. In this no man’s land the more time we spend below 5038 more it speaks to a bearish continuation. The more time we spend above 5038 the more likely we are to retrace higher into the previous range. Something a little unusual to my premarket session s is today we have a chop zone between 5050-5081. I recommend you be very careful in this chop zone because of the potential for a lot of stops and starts in this zone that could potentially happen. On the other hand, if we continue up the resistance battle ground is between 5081-5108. In this battle ground 5095 is the line of Demarcation. The more time we spend above 5095 the more likely we are to push higher on the day for a deeper dive next week. Today’s reaction areas are as follows 5034,4995, 4991, 5047, 5056 and 5073.
Remember we are right on the edge of an all-out volatility run. The moment the /vxk24 goes above the /vxm24 we will see the market turn angry and sell off, so keep watch over this backwardation to occur.
Remember: Your most important job as a trader is to protect the capital you already have. You do this by knowing and understanding the risk you face in each position and in the current market conditions. We manage that risk in accordance with our account size. I hope this helps, wishing you a positive trading day, let’s make it a great one.