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Moderation

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While trading is clearly not my strength, I want to reinforce that this is an environment where one has to be very careful trading off the obvious. There have been a number of breakouts and breakdowns and everything in between over the course of this bear market.

The catalyst to be a buyer late last week was that the market was moving toward oversold and was near trading range support. That reason has been eliminated. Does the market just tank then after the opening? I would argue maybe not because too many expect a significant bounce once anything happens or is resolved in Iraq meaning aggressive shorts may not want to be exposed to a potential spike higher and therefore may not press the downside.

The technical backdrop should be used as a piece of the puzzle, not the whole story. The whole picture suggests staying out of the way because of the technicals I outlined earlier vs. shorting or selling aggressively into a size down tape.

If the market was to open flat, the story would be different - but it is set to open down big.

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No positions in stocks mentioned.
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