Morning Report

The bears refused to grasp hold of the market yesterday (as I tweeted) and the bulls took over from the 922/923 area of the ES and that’s where I’ll be focused mainly today–whether or not we can hold that level. The tell yesterday for the lack of conviction by the bears was the poor showing of -1K ticks. Yes, the cumulative tick was bearish throughout the day and the breadth was as well, but no forcefull selling. To me, when the bulls’ stops are hit and they begin to sell we could leg lower. However, until then I have to believe we are moving higher, especially with a break of the 200SMA this week.

My thoughts are also upon the markets entering the summer months and how in years past my best strategies have been directionless. In other words, I’ll be focusing on selling premium, mainly in the indexes, using credit spreads. I like to leg-in to iron condors  mainly and will do a bulk of my trading in that arena as they tend to be easier to manage versus a pure directional play. Tomorrow brings with it the first non-farm payrolls data post the “sell in May and go away” mindset so I’ll be watching volume to give me a small indication as to what might be expected as we move deeeeeeep into the summer.

This morning is proving to be a continuation of yesterday’s bull run at the close as the futures are pretty much flat. The thought had occurred to me after market close yesterday that we could gap lower today, but at this point it appears as though we’re looking at a flat open. The futures did move lower off of the ECB’s decision to keep rates where they are and the dollar rallied. We got the weekly jobless claims and that provided a lift off of the lows so the market has plenty of “juice” so far. Big Ben is due to deliver opening remarks at the Federal Reserve Conference on Financial Markets and Monetary Policy, in Washington DC later today.

I’ll mainly be keeping an eye on the ES futures to see if they stay within yesterday’s low and Tuesday’s high. With a break of either one of those areas we could see some panick buying or panick selling. Here’s some of the stocks (mainly retail with sales data out today) that are on my radar this morning.

  • TGT: had May sales that were ” somewhat below” their expectations
  • YUM: recently had a breakout but today is downgraded. Watching to see how severe, if any, of a pullback is seen.
  • CMG: Upgraded to a buy and price target of $100
  • TJX: has had a great run here and it appears as though May’s sales were strong
  • ANF: May sales looked to be lagging peers and stock hasn’t really tested 200SMA for support since breaking out.

Good luck out there today!