Markets Approaching Key Support

Its Jerry Lee Lewis day at all about trends today namely: ”Great Balls Of Fire” And there’s a “Whole Lotta Of Shaking Goin On”
And that is what we are seeing here folks today.
Yesterday folks the 1600 zone on the SPX was holding all until? The afternoon when it broke and free fell into the close. Since then? We are in the process of seeing some confluence that tells us to beware on the short side and if the what to watch out for on the short side is starting to rear its head? Well then its the what to watch for on the long side that’s also in play.
Lets get into the charts here shall we.



So like it or not from an emotional standpoint here the best course of action is to probably do nothing here and wait for Jerry Lee Lewis to exit the stage, the charts are sure saying so. Who knows maybe the next act on American Bandstand is going to be Elvis and everyone went gaga when he took the stage. After all volatility goes both ways as we’ve seen recently. We’ve seen big moves to the upside and of course we’ve seen big moves to the downside so expect that to continue.
Its the weekend and who knows, MAYBE the new mainstream media battle cry emerges of the reason they are talking about scaling back tapering is because the economy is strong enough to stand on its own and that is a good thing. At some point that will be the next ra ra ra you watch. You see folks at extremes the market always looks for a catalyst or something it can hang its hat on to move it the other way if even for a few days.
Game Plan Week of 6-17
We have a fair enough of exposure right now with our current positions. Now it’s all about managing our risk here. In the end it’s going to be gain wash or loss. We know where supports are, we employed trade size risk management.
6-21 Given the markets have just sold off , given its options expiration, given the end of the quarter is next week, given we are getting some extreme short term indicators kicking in some deep oversold levels we are probably best served to bend like a willow tree in the wind right here for the day and use any strength next week to lighten the load on the longside.
Not fun here I get that, I get the emotional stance of wanting to kill everything here I really do (in order to stop the emotions of fear), but that is also about the time they turn the markets. Its an internal indicator Nervous Nellie uses to stop the emotions she feels and that’s about the time (after she walks away) the markets tend to turn around (without her) and show some sort of bounce.
Yesterday we said:

We work with what we have currently and should we see bounces in our issues we may start to cull some names and reduce exposure as we’re not sure big picture we are done going down till we take a look at the support zone of 1575-1580 ish when all said and done.

And here we are looking at the 1575 ZONE into the weekend. We’ll talk about this weekend about the short side, what to do with a bounce, where are we big picture? All of that so stay tuned, in the meantime like we said, bend like a willow tree in the wind vs an oak tree who’s limbs tend to break in the wind.
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