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Dina, I certainly would prefer another day of downside. Yet, the SPX is regaining its losses as money rotates into larger cap stocks…
From a technical standpoint, it would make sense for the markets to retrace a little more. It just “feels” like there’s no proper downside followthrough going on.
Finally getting some reversion. Oil and commodity stocks finally getting hit. Expect one more day of blood and that’s where you should take profits on your shorts.
Thanks Steven. Covered/ rolled up some shorts today (with caution) and may be some more tomorrow. Is it OK to roll up the Bull put spreads which have lost a lot of delta due to recent surge up in the market. They are similar (strikes) to the BPS in your Apr SPX IC. If so, will 1830/1840 be OK. I am hoping to bring in 50C to the spread to cover the costs of rolling up as well by doing this. I am still half size on the Bear call spread side.
Thanks much.
U R Here map update:
We’re under 100 DMA, pulling back to 61.8% Fib, BBands starting to pinch in, 20 day about to cross 50 day MA… take this very lightly and let Theta gods be with you.
@Suresh I think a better strategy instead of just rolling is to close out your bull put spreads and re-initiate on a market pullback.
It also may be simpler to start stalking new trades. May SPX iron condors for instance.
TLT putting in a falling wedge pattern.
After a strong breakout and going parabolic, treasuries have the potential for a continuation pattern.
If the etf does manage to breakout, then it is not bullish for stocks as it signals traders are rotating back out of stocks and into “safety.”
Bonds are the weakest asset right now along side with the usd in a basket of commodities futures and currencies. Chances are they are gonna drift lower more than how the market can drift higher.
Speaking of bonds, here is the weekly TLT:TBT ratio chart. http://schrts.co/ENmGLe
New catalyst coming into play:
The 25-member Governing Council, meeting in Frankfurt on Thursday, cut the rate on cash parked overnight by banks by 10 basis points to minus 0.4 percent, and its benchmark rate to zero. Bond purchases were raised to 80 billion euros ($87 billion) a month, starting in April, and corporate bonds will now be eligible. Draghi will hold a press conference at 2:30 p.m. local time.
The ECB just fired their bazooka. Rates are negative and they’re buying corporate debt as well.
Remember how everyone was scared of high yield debt creating some sort of contaigon in the global markets? Well, the european central bank is trying to head that off at the pass.
We’re gonna squeeze even higher on this news.
Let’s see how that reflects into the income trades. I see pain ahead. Exotic pairs are squeezing, we are still in risk on mode here.
The S&P 500 is bouncing off of logical support right here.
I personally would prefer a deeper pullback but my thesis still is that this correction will be more rotational in nature. Way too many people are anticipating “collapse” when… if you look at how we are trading there isn’t much followthrough to the downside.
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