10/14 - Market Analysis

SPX
- consolidation day on average vol



NDX
- weakling of indexes
- fell hard after closing gap


XLF
- fibonacci turned out to be important. we closed a doji right on it
- very neutral


A/D
- shows just how undecisive the market was
- neutral remains the theme
- BUT note that the down volume dominated in the nasdaq and AMEX...this is not good...

Analysis
- as a bull, i was hoping and expecting a consolidation day. having a day that ends + or - 100 would have been ideal and that is exactly what i got. and since volume is still not superhuge or lopsided (except for the ndaq). everything was good except that we had more than a small pullback in the nasdaq....and the doji at possible resistance is also bad...in the past it shows that it is a pretty reliable sign for reversal
- ideally, i would have taken all my profit at the open and been sitting at the close with a small index position going bullish..but as i am being more aggressive, i am leaning more towards today staying just a pullback day in which tomorrow the rally WILL resume...
- BUT, with the doji today and huge fall in nasdaq, if we get another down day tomorrow, i am switching out of being bullish....

Best Sectors
- rkh, xlf, slv, gdx, xlv

Worst Sectors
- smh, fxi, eem, qqqq, hhh (closely followed by TAN, USO, KOL, XME)

Sector Analysis
- very much a reversal from yesterday...switched from best to worst and worst to best (reason why i said i didn't want to buy puts)...either that means that yesterday was a very bullshit relief rally for the super oversold sectors OR it means that today is just a pullback from the huge moves of the last 2 days for some sectors...
- judging from the intraday charts, and retracement, the commodity and tech stocks basically just retraced about 31-50% of their move...seems healthy...unless it continues to sell off tomorrow....

Tomororow's Playbook
- if opens up huge (300+ pts) - take profits and be 100% neutral until the close
- if opens down huge (300+ pts) - watch 5" chart to see if a total liquidation of calls is needed
- if makes a lower 30" high - take profits and be 100% neutral
- if closes down huge - sell calls, buy an index put
- if closes up huge - hold calls but trim positions at EOD
- if closes within a 100 pt range of 0 - sell everything and be 100% in cash (and bearishly biased)