Intraday trade: The S&P 500 index may slightly extend its short-term advance today. However, we can see some technical overbought conditions that may lead to a downward correction. Therefore, we prefer to be out of the market again, avoiding low risk/reward ratio trades.
Intraday trade: The S&P 500 index may continue to retrace its Tuesday's move up today. Therefore, an intraday short position is favored again. Stop-loss is at the level of 2,460 or 5 points above Tuesday's daily high. Potential profit target is at 2,425, below Tuesday's daily gap up (S&P 500 index).
Last week I told you risk for the markets was off the charts. Last week Google is down 1.5%, FB down marginally, Amazon down 2%, AAPL up marginally and NFLX down 5%. Biotech is down 2.9% as is housing. These are not big numbers, but when you look at some of these charts we are starting to see technical damage for the first time in a long time.
Right now, the FANG stocks are getting hit. The question is whether there will be follow through. But other sink holes in the market are developing. The Transports got smashed on Thursday and it was only three weeks ago they gave the Dow a Dow theory confirmation when both went to new highs. On Thursday and again Friday the Dow itself hit new all-time highs. You see the trannies going the other way so this is becoming the classic non-confirmation.