SMF Pro Traders we are looking for the move down during this period and we are going into the middle of the week and stocks have pulled back. The selling is here for only as a trade during this period only, so lets keep that in perspective.
1. The Bear Market cycle has done its move since the lows in March. There is not enough cycle events during the next month to really break a lot of overvalued stocks higher.
2. Stocks that are undervalued we are holding for the year end move only.
3. Oil stocks need to be looked at and other sectors if oil does move higher there are plays in that sector.
4. We need to be shorting the move once we move out of this expiration when stock hit there resistance levels.
5. Indexes have support at levels on the S&P 500 at 950 if = it breaks there is not more support until 905.
6. Technology indexes have made there move once we move out of the expiration they need to be sold short in a weekly pattern as there not buying them at these levels.
7. Health Care stocks can make a move once we get a good view of the HMO stocks with new developments moving forward.
8. Casino stocks such and WYNN have moved much higher and are not sustainable and need to be short after expiration.
9. September and October create buying opportunities in various cycle patterns and I have talked about the move needing to correct for sometime now to come into next line of the cycle patterns.
10. SMF will be monitoring the selling on low volume as we move forward and profit taking as people are gone and stop market orders remain on the left side of the market place and gap downs trigger those stops and will provide your short sales after the expiration is over this week.
11. Economic recovery is what they're buying into right now. As we move forward, it will not be so much about fundamentals as it is stimulus packages as they will start to hit in the fall period. This will give the pull back support from the March lows we still are overbought in most areas of the markets. After a massive Bear Market Short Covering, now that cycle has played out it becomes a stock pickers market only.
12. Fundamentals will come back into play as consumers are weak and unemployment remains week. Market pundits and stock analyst have been putting this on the back burning for now as most believe the consumer will spend in the fall period.
13. Selling short and examine the delta movements is the key and working the trading ranges correctly using the SMF Formulas only in both directions moving forward.
14. September selling and asset allocation models preparing people for position management trades based on profit taking in weekly dollar price movements.
Saturday training session need to address the all of these key points and if we don’t see a move during the next 3 trading days, we are going to build out the short sales that work for you no matter what the bigger players are doing. We are going to take advantage of the absent buyers that support stocks in the cycle at support levels.
We have seen in the very short term the beginning signs of this going back into last week when this selling started and we expected this to happen as it is only natural for the nice pull backs and we are trying to pop the long side during expiration only and that is what this was about on the long side during this week only.
Mario Marciano
SMF Master Pro Trader