We remain in the seasonal area where risk could arise at moments notice but have managed to navigate things quite well so far. There are a few really good setups starting to form but the key will be to remain patient and not fall for the many traps currently being set. Lets dive in, starting with a nice trade setup here.
Playing the Averages
Market has been negative the majority of the time the day before Rosh Hashanah (9/11 this year) and so I expect some more weakness tomorrow.
This creates quite the opportunity, as 9/11 is almost always a bullish day. I think buying the dip sets up a nice win on Friday to start the weekend. At close or near index support on Thursday I want to target 9/14 calls on the index, SPX or XPS my own preferred vehicle.
Catalyst Thursday and Friday
Jobs and PPI on Thursday, and CPI on Friday will be key this week as FOMC is right around the corner. This will have impacts on precious metals, equities, and volatility throughout the market is very possible.
Seasonality This Week
Notice the early part of the week as investors return from Labor Day there is often some profit taking.
Data via Bluekurtic Market Insights
RSI Signals - S&P500
RCL, SYK, looks to be a potential setup I like on the long side with energy names I believe setting up for a top soon as XLE starts to stall despite continued strength in oil.
Index’s
A new upside gap opened today and we are getting very close to the August 4th gap at 758. Watch that level for potential support.
Volatility
We briefly went sub 14 last week and now are back on the move
Shouldn’t be a surprise to anyone
Market Outlook and Favorite Setups
I continue to think being more defensive is the play here, let the market and the dust settle as this is the window where risk can really spike, creating a great buying opportunity if positioned correctly. Here are the key names and potential paths I see the market taking
