S&P 500 futures are up this morning, but the futures are showing an opening bump into resistance, with the expectation of the S&P opening about 1366, with this week’s high at 1367. I was thinking about dumping my TZA position before the open until I saw this. While the S&P might break this resistance today, and possibly even last year’s high of 1370, I would expect a little pullback at some point today, probably this morning after the open, before the markets continue back on an upwards trajectory.
Time for the limbo question: How low can we go? I would be surprised to see the S&P hit yesterday’s low of 1352, but it is possible. If we get bad news at some point, the next level down is 1341 (20 day moving average), and for really bad news the 50 day moving average is all the way down at 1298.
Overall, I expect the S&P 500 to go up today, but not a lot. We will continue staying leashed to the 20 day moving average, with a roughly 40 point leash. Needless to say, bad news will toss this “floating resistance” out the window. However, I don’t think good news will push us much higher than the leash.
In TZA right at closing yesterday @ 18.28 and have a sell limit @ 18.81…
STL,
I’d be surprised if it goes that high today. I’m looking to get out of my TZA position with a loss.
Thanks Ed…I did lower my sell limit order, but figured I’d keep TZA over the weekend.
I placed a sell order for 18.64. My cost is 18.55
I’m going to try and sell it for 18.55. I’m not betting on it though.
Ed, are you still expecting strong resistance at 1370? If so, why would you dump TZA when we are almost there?
Trader,
The problem is the downward bounces haven’t shown a lot of movement. Also, I expect we will eventually break that level, although it may or may not be today.
Sold TZA at 18.30 for a 2.5% loss.
Heyyy Mike…
Are you looking to get in SCO today?? Just curious…
STL,
i think Mike will second this, but the oil market is a little nuts right now. If you’re playing oil, you’re in UCO right now. I’m only in it as insurance, and it’s done well. Oil will eventually return to earth, but who knows when? Avoid SCO for now.
Already bought in pre at 31.86 sold at 32.24
Mike,
You’re crazy, although I can’t argue with your results.
Thanks Ed it is nice that we finally have found something we agree on- I am crazy………….. Look back at last year we had a lot more BS in mideast and oil could not sustain price. If it does the good news is we will probably get a new pres-4-5 buck gas will not be good for the bummer-I hope the tears don’t short my keyboard.
Sorry I totally disagree Ed- inventories are up dec-jan and feb. Emotion driven. I would not touch uco with a 10 foot pole. That sucker will drop like a stone…………. Bought and sold SCO yesterday and today for profit-also have a large upside down position. I will second nuts part though but then again it always is.
Mike,
I agree with your reasoning, except the oil market isn’t being driven by logic right now, let alone the the simple supply/demand rules of economics.
I will add there is another explanation I’ve heard for oil’s run-up, and that is the devaluing dollar. With gold’s move up recently, that does make sense, although I hesitate to say that is the entire story. I look at the dollar’s devaluation as more of a contributing factor rather than the whole story.
Nice trade Mike. I’m still holding my SCO positions. It looks like oil is going up based on Iran. If something doesn’t happen soon, I agree it will drop hard. My guess is nothing happens. Looks like the same old game to me. Run the price up on fear, get everyone to jump on board and then pull the rug out. Just my opinion.
Ed market never is associated with reason. I watch the dollar by the minute everyday and have stated so many times. Right know market is totally driven by the dollar, this how they manipulate the market. dollar up overnight-look at forex- trash it all day- rinse repeat everyday- They are moving the dollar now much more to get less- this is close to a broken correlation. Our it economy will not flourish or stay positive with 4-5 buck gas. Advice- worth what you pay for it-forget the word logic- it does not exist here………………..
Also Ed- I am so crazy that I think it is insane to go long oil here. risk now is to downside not up. Time will tell.
Something bad coming? VIX has jumped.
…and yet the dollar hasn’t really moved much. I don’t get it.
Ed or anyone,
With the dow failing to hold 13000 for a third time I think does that point to a coming pullback? If so what do you think is the range 5-10%?
My quess is that we’ll see a 5% pullback within 2 weeks.
Without news, the market can continue ticking up, although at a very slow pace. Having said that, the unemployment report in 2 weeks worries me.
Trader,
Check out the put volume on the spy for Mar17. A lot of action in near the money puts today.
Yes, alot of bets on the downside. 1370 looks like very strong resistance to me. Markets very rarely break through old highs on the first attempt. Doesn’t mean it can’t happen; however, I would be surprised if it did. Look at the SPY and the 200 day ma. It took several attempts before it broke through. I would guess that the same thing will happen at 1370. I’m not so sure we aren’t at the high right now. I’m still holding TZA.
I’ll hold my TZA over the week-end. Avg cost is 18.55.