A SPECIAL “FAST MONEY” PRE-SHOW MESSAGE

“Yo, what’s up, bros? ABSOLUTELY, we gonna lock in some bullish call spread ponytail profits today. This market is ballin’ brah. But I’m battlin’! I’m battlin’ hard just like I do at the Jerzey shore every summer. True dat.”

The market has had multiple chances to fall off of the cliff today. Internals have been weaker than the broad averages all day long. As I am writing now, I see more green across my screens.  However, the Nasdaq is the noticeable weak link.  I would use today’s close as a good indicator of how the market performs the rest of this week.

Keep in mind that we successfully tested the $SPX 20 day moving average today at 1183.  So, the positive reaction we had to that reference point is obviously bullish so far. If we slip down near the close below today’s low, I will likely look for some short exposure. On further strength, however, I’ll look for long setups.

The early part of this week should tip you off as to whether we are going to have a deeper correction, or just another shallow pullback that will be aggressively bought. You can still have skin in the game on the long side, despite my belief that you should have a healthy cash position at this point. Below, please find my top setups for this upcoming week. I have included only a few for now.  Keep in mind that despite a bullish individual chart, if the market corrects then most stocks will go out with the bath water.  Feel free to pick and choose which ones best suit your style.  Also, remember that even the highest probability setups can fail, so please use stop losses to manage risk.

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Trading Vid

I made a video analyzing a long term chart of the $SPY. I hope you guys find it worthwhile.

The $GOOG reaction after the bell yesterday, the Greek and $GS news today.  All of these excuses were posited by many as the culprit for such a glorious bull run seeing red today.  To be sure, the $GS news affected a great number of stocks in the financial sector, in particular.  However, what I saw today more than anything else were some great, convenient excuses to take profits, as the $SPX fell 1.61% to finish at 1192. Although we pierced and closed slightly below the trend line of the rally since February, keep in mind that in the past two months we have covered a lot of ground, going from around 1043 to 1213.

The good news is that all of those cautious bulls who have been whining about the market being too extended should have some great entry points if we continue to pull back next week.  The first target is the 20 day m.a. around 1180 (we came close to hitting it today). After that, we are looking at a huge retest of the original breakout point of the rally at 1150, followed by the rising 50 day m.a.. Needless to say, the bulls have many layers of defense to back them up before we can come close to saying that the tables have turned in favor of the bears.  Despite the scary headlines today, you have to keep in mind that it has been profitable to buy every single market pullback since March of 2009.

As I noted earlier today, I got stopped out of my $CLNE and $CSIQ positions, and I now have a very high level of cash. I continue to like my $EPAY and $DPZ positions.  My main focus is observing the action early next week with a watchful eye. On any sign of the buyers stepping back in, I will look for long setups.  Today’s action was constructive in helping to sculpt less extended, yet still bullish charts.  As I have said for over week now, having extra cash than usual on hand during earnings season is proper strategy.

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This morning I got stopped out of my $CSIQ and $CLNE positions.  My cash position is now at a very high level again.  The $GS fraud charges by the SEC , combined with an options expiration Friday have given the market a great excuse to sell off and raise volatility.  Regardless of what happens the rest of the day, early next week will be the real “tell” as to whether this is the beginning of a correction or just a blip on the screen.