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Even though stocks, as a whole, have markedly improved over the past few weeks, mistakes are still being punished. Case in point: This morning’s gap up at the open has crushed those traders who chased on the long side. Moreover, we remain in earnings season, and there have been plenty of stocks that have sold off hard after the announcements, which is the main reason why I usually trade around earnings.
Overall, the market is still consolidating in a rather orderly manner. So, even though mistakes are being punished the bull case remains intact. The S&P 500 has retraced back to its rising 20 day moving averages with benign selling, and even though this morning’s gap was faded I remain constructive on the market. We are focused on disciplined trading inside 12631, and not becoming exuberant in chasing this morning’s gap higher is a pretty good example of how much value our community adds to its members, rather than cherry-picking a monster winning trade.
As today’s session progresses, I am looking at the 1300-1308 area on the S&P 500 to see if it acts as support like it did yesterday. A few ideas on the long side that are acting well despite today’s selling: AH DAN OXM.
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Let me guess… Vice President of the school’s D&D Club?
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