STEP UP, SON

We talked about the possibility of the market giving one more dip before the others participate. We’ve been tracking this market set-up in After Hours with Option Addict, saying that it looked as if the indices could trip their lows here, but that the Russell had likely bottomed. Today, we’ll review watchlist set-ups for next week. The goal is top 5 high beta and top 5 low beta set-ups.

Off topic, but I sold my $LULU position earlier in the year and recently decided to replace it with $YELP.  It was a top 5 position in terms of weight/size. I am 2/3rds into the building process with one more add left. I am also considering April calls if it comes in a little, but not too much. I’m pretty certain I initiate the calls here today, as discussed in After Hours with Option Addict.

More later,

OA

Market acts like it closed early for the day. I’m having a hard time finding anything I want to buy either, so I am a little more focused towards existing positions and managing them into expiration week next week.

Gun to the head there is one more dip left to buy, but the Russell has already bottomed.

I like $GRUB, $TXTR, and trying to find a bank since my $MS left without me.

OA

While coming dangerously close to an oversold reading yesterday, the Russell divergence continues to strengthen here today. Breadth has seen steady improvement since its collapse on Friday, but has seen no real extreme buying down here yet. That’s the third and final piece to establishing a tradeable low in a developing trend. Watch for it.

I spend most of my day in a doctors office, so I’m trying to catch up here. I bought $WDAY calls at the open and added to my L/T position in $YELP. I’ve also been visually molesting $GRUB all day.

Got any moves here?

Right here right now, the $NYMO is at -72. A reading of -80 or greater has been a lay-up as a buy signal. While you may not be looking to buy dips at this juncture, just know that strength is on the horizon to make adjustments to your positioning.

Range bound action with the indices unchanged is not what I thought we’d see given Friday’s price action. Breadth on the session is weak, struggling to stay positive at all in the last few hours.

I think today will likely set the tone for the week. If breadth doesn’t improve here, I would have a bias to short pops this week in the indices, while trying to trade around a few stocks such as FB, WDAY, BLOX, BIDU etc.

After such a negative breadth day on Friday, the only thing that should have you optimistic on the market from here is a bullish reaction that registers nearly as extreme. In other words, the guys on the sideline that are waiting to buy the first market dip after the prior breakout don’t exist as of yet.

OA

Odds are you might regret not starting something down here, especially if you were somewhat light over the last few weeks. As I head out for the weekend, here are my top picks for next week…

$FB

$BIDU

$BLOX

$N

$WUBA

$WDAY

Enjoy the weekend.

OA