I WILL BET YOUR OVARIES THAT THE MARKET TRADES HIGHER FROM HERE

Today’s open is smoke screen. Risk stocks are steady, no extremes behind this mornings selling. Therefore, I still like this market to make its way higher before we reevaluate.

Long SPLK calls at the open, and IMPV calls here. The software space is lovely.

Risk on. But we’ll be watching the health of this move closely.

FOR MY After Hours with Option Addict PEEPS – I will be out of the office later today, and possibly tomorrow. Therefore, if you have time during the day, I will be hosting a quick discussion about the markets at noon ET. The login details are on the After Hours with Option Addict site.

OA

The energy sector has been obliterated here as of late, as you all well know.

It is during selling pressure like this that I like to break out the point and figure charts.

My preference with these tools is not timing based, but to look for low risk and manageable opportunities in oversold sectors.

Let’s start with an evaluation of this sector through the lens of the bullish percent indicator. As the signal suggests, this is the most oversold the group has been since 2011.

To make it simple, lets say there are 100 energy stocks in the Energy sector. A bullish percent of 11 would mean that only 11 stocks are on a buy signal, while 89 energy stocks are on a sell signal. You could spend a lot of time thumbing through charts of energy stocks on buy signals, but here are a handful to consider…

BHI, SLB, WFT, APA, DVN

The above tickers are stocks that remain on a buy signal in the energy sector, where longer term trends still remain in tact. Each of these stocks also generated MY OVERSOLD SIGNAL into today’s reversal (all three time frames).

These tools are great for longer term holds. If you have a 3-6 month time frame, I strongly recommend you take a look at this style of analysis.

This is truly the most impossible set-up of the year.

I pay very close attention to investor sentiment. Through blog comments, traffic, posts, emails, memberships, behaviors, etc. Up to this point, I’ve yet to see a move that converted more individuals to navigate towards changing their opinions on the market this year. Not to mention, all the way down here at these lows.

This has been a pretty difficult year overall. One that if you didn’t have a bias or a plan, you could blow up in the midst of all this.

The confidence levels in bears is at highs for the year. They see a little light at the end of the tunnel. If you are now bearish on stocks, XLU leading the upside here and the speed of this market are now a concern.

The outside day in the indicies means this has legs for a few days. It is imperative you focus on how participants position here to determine the next move.

OA

Since its Fed Day, the market action should slow this afternoon to a point that allows you to get some meaningful analysis done.

While many are in no rush to buy anything as of yet in this bid-less market, you can at least put together a list of stocks that interest you that rainy day when the time is right.

Last week we were focused on software stocks as a group of interest. Using them as an example, I think one of the best signals you can use to define relative strength in this market is to focus on stocks that are not going to new lows with the market. Last week we used SPLK, GWRE, DATA, etc. When the market popped, these stocks moved the most.

Should this market reverse soon, new leadership will be born. This price action helps you determine which stocks are being accumulated into market weakness.

More after the Fed,

OA

Well, based on our plan last night, I came out swinging. I picked up BABA calls and GOOGL weeklys and am stalking GOGO.

From failed rally, to failed gap down, this market is doing its best to frustrate everyone before it makes the move it wants to make.

To update you on my oversold signal status, my long term signal line touched down in oversold, while the intermediate term signal is registering oversold as well. Short term signal line has not yet crossed into oversold.

I still view this as a market with limited downside, and major upside risk.

OA

Look, I started writing about the prospects of VSLR almost a year ago. Having in place an monster infrastructure from door-to-door security sales to use for growth in the residential solar market is a compelling reason to look at this company. I have a few acquaintances that are pretty high up in this organization that have physically shown me how fast the company is growing. That growth rate is what interests me in this company.

Aside from this, the IPO couldn’t have happened at a worse time. Oil prices haven’t been able to hold a gain, and traditional energy stocks are on a slippery slope here. It’s not just VSLR that is trading lower, its the entire space.

Because of these horrific conditions, I said at the time of purchase that I was only taking a small position for starters, that would commit me to building it in the days ahead. I’m sure that because this company has been on my radar for a long time, that this means some might have gone overboard in positioning here.

I have a longer term bias on this stock that I am looking to take advantage of. This price action in the short term will help me build at some pretty decent prices. If you are looking to invest here, as am I, and have only started small, we’ll be looking for the best prices possible in the short term to average down, while watching this action in the overall energy space.