MID DAY MARKET STRUCTURE

Last night we talked about a market bounce that would materialize today, led by energy stocks. The crew in 12631 nailed this ERX long, and those stocks appear to be heading higher.

We discussed an important move to follow in the Russell futures contract, specifically to 1170. Take a look at this recent range, and the profile.

The move to 1170 is a line in the sand for the next two weeks. If prices trade above this level and accept higher prices, the TF hits new highs into year end. If not, we’re heading back to test October’s “conviction” day in the Russell.

Crude oil is key here. There was enough volume in the last few trading sessions to mark a tradeable low. I think the rejected move below $68 is important, and a close above this level is a win for oil prices. That likely sparks the first real tradeable low in oil, which should keep energy stocks up. I think this is a much needed move to keeping this market elevated.

Long KORS and COP Jan calls. FSLR on watch here.

OA

This massacre in energy has started to spread into transports. This chart of the IYT could be a game changer, in terms of overall market health.

We use sentiment charts to identify possible turning points in stocks, and Friday’s high volume failed breakout, followed by today’s washout is starting to show significant deterioration under the surface.

The main reason I’ve never gone after a market top call, is that we’ve never seen significant sector divergences this year, up until now. Energy stocks should lead a market bounce by mid-week this week, and if the IYT can’t recover, we might have to switch things up towards the end of the week in terms of strategy and approach.

OA

The swift sell-off in stocks this morning offers up some pretty attractive prices for the weeks ahead.

I’ll be watching the Russell into this weakness, as an indicator to the markets appetite for risk. Should the Russell demonstrate any relative strength this afternoon, I’ll take that as an indicator to initiate a couple positions later today.

I’m currently watching SPLK, FEYE, and FSLR.

If Gold prices hold 1200 again, we’ll be looking at a few miners to short later today in After Hours with Option Addict.

More later,

OA

We’ll, at least we now know what Gold prices have been setting up to do.

I’ve been nibbling around trying to position myself for this next leg down in Gold and Miners. Over the last two weeks we’ve talked about the possibility of a move starting overnight, catching people off guard and not in a position to get out in front of it. Funny to see that was the way it played out.

Earlier this week, a lot of folks reentered the JDST for what was a massive move on Friday. As posted in my comments, I managed to catch a short in GC Wednesday night, which was the single biggest move I’ve ever caught in the futures market.

This Swiss vote should provide momentum to this move, and should propel prices to our eventual targets. I figured I’d try to open another short when futures open, and then discuss possible instruments to play when the market opens tomorrow. We might even take this down to picking some actual mining stocks to short as opposed to JDST or GLD.

If you have any mining companies that stand out as possible short candidates, post them in the comments. We’ll do a top down analysis in After Hours with Option Addict tomorrow.

OA

Hat tip to @rahagar for the title.

Hap tip to the turkey gods, as always, for always bestowing upon us incredible profits ahead of a holiday feast.

The beta basket is looking great this week, and should have enough mojo to carry over into December. I don’t plan to add anything here, other than time with the kids ahead of the holiday.

I hope all of you, even the asshole antagonist vagrants, enjoy the holiday festivities.

Happy Thanksgiving,

OA

Market extended or not, its hard to rationalize shorting growth stocks into the hole going into Thanksgiving week.

I have a basket of momentum stocks now, including BITA, GOOGL, PCLN, GPRO, BABA, LNKD, FEYE, YELP, MKTO and TWTR.

I like the recent action in these stocks, especially against last years year-end analogue.

I’m watching YY, GOGO, ATHM, Z and COUP.

What are you eyeballing here?

OA