After the first hour or so, the markets came a bit off the lows. The $133.60-133.80 level is the upper floor, and it held. The low of the day was $133.84. We now have a new opening range to trade against, which is $133.84-134.35.
Only a few stocks went green, giving a tiny window of opportunities to trade around positions, i.e. covering some shorts/hedges and adding some stronger stocks to manage existing account.
I think most are getting spoiled in this tape. The strongest/fastest stocks and markets tend to follow their 10/20day moving averages. The Indices themselves have become extended well above them and the market was due for at least a slight pull.
At this point most need to figure out their commitment and time frame as we move forward. The 10day moving average, which we are still above, is $1335. A close below this level and we could see a complexion change. The 20day is 1321, a spot that, if we get there, would still be considered a very strong tape.
Over the last few days, the VXX went up as the market didn’t pull in, giving a few some clues that the market was ready to be shaken up. Also as the world has been enamored with Apple (AAPL) the breadth of the market move has been diminished.
I covered most my hedges but not fully prepared to add to longs given the mess with the Greek cabinet.
On a side note, February is my least favorite month of the year, especially mid-February. Football is over, you can’t bike outside, important earnings are almost over, you have to buy chocolate because of the media, and that’s just to name a few!
*DISCLOSURES: Scott Redler is long SPY, OIH, WMT, LULU, VMW, QCOM, HAS, AAPL, TBT, VXX (sold more than half). Short DIA, QQQ (covered more than half of both).
So far it feels like today could have been worse.
