FREDAlert!
Volume 3, Issue 8
November 1, 2011
We are seeing a bit of market turbulence this morning. We think the following:
(A): We showed resistance areas on various broad indexes and ETF’s weekly charts in Monday’s report, and these areas have held the market for now. This is not a huge surprise. We indicated we would like to see us down in the first part of the week and up at the end – so far this is in fact occurring.
(B): The reason for this decline, as reported in the news, is more European problems, such that bearish sentiment should remain elevated, and much money may still remain on the sidelines. Another way of putting this is that market participants who were going to buy the next dip, may not buy again because of the “news”.
(C): The 123 area on the SPY is not as important as the indicator configuration to me. I would LOVE to see a down week to correct the Weekly FPO and this would set us up for further rally. But, this is correcting indicators like the McClellan Oscillator and such.
(D): I would add money on this decline. I would try to execute some buy/write strategies on this decline to capture premium.
(E): We want to see the close and will have more for you in the Midweek report, tonight.