The S&P 500 continues to move along the “most likely” scenario path i.e. grinding higher into the next big area of resistance. As I indicated in this morning’s “huddle” post, the S&P did indeed test the 1600 area and closed above it without too much drama or struggle. Following a gradual mid-morning pullback to 1595, the S&P spent the rest of day slowly climbing higher in a well defined upward channel and closed at 1603.
This is the point at which things get a little more complicated. Including the Monday afternoon bounce off the 1560 level, today is the third day of the oversold rally and at this point the easy gains (if there were any) have been made.
I still believe the S&P is likely to push a little higher and test its 50dma, but whether we get there and how is much harder for me to visualize as the odds of a market reversal from here have increased significantly. We will just have to sit back and let the market show us what it wants to do.
For me, today was very similar to yesterday. Once again, all the gains for the day were made in a very few trades (two to be exact: BEAT and RPTP). I had two other winning trades (both in SNTA), and a smattering of tiny losers (AAPL, AMSC, second BEAT trade, second SNTA trade), none really of much consequence.
The biggest whiffs were HIMX and the end-of-day move in RPTP through 10, I was late to the party on both.
The most frustrating trade was in AAPL where I saw the bounce setup from 396.50+ area to about 400 (and tweeted about it ad nauseam), but executed poorly. I got stopped out of the trade with a very small loss but then neglected to jump back in on the 3pm expansion bar. AAPL did subsequently rally to about 399, so had I executed better I would have been able to easily take two profitable pieces off.
- Gross % Return: +1.23%
- Net % Return: +1.11%
- Total points: +0.66
- Number of trades: 9
- Green trades: 5
- Biggest point winner: +0.43 (RPTP)
- Biggest point loser: -0.27 (AAPL 2nd)
- Biggest % winner: +6.27% (BEAT 1st)
- Biggest % loser: -0.65% (SNTA 2nd)
For more details on the day’s trades, please see the attached log.