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The best tool for trading high volatility.
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Tuesday, March 18th
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“I despise formal restaurants. I find all of that formality to be very base and vile. I would much rather eat potato chips on the sidewalk.”
– Werner Herzog
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An interesting market yesterday. As you can see in the above image, the market rallied…except for the Mag 7. This is a radical departure from normality; for many moons, any rallies have been led by Mag 7.
This could signal a decent reversal coming for the markets. Yesterday, SPX bounced up against the 200DMA as expected. However, I’m writing this right after open, and we’re down a bit. The 200DMA is very important level. One or two more tests without breaching 5705 could see us drop down to 5200 level.
An interesting trade idea could be selling credit spreads at the 200DMA level at least until monthly opex on March 21st. The 21 MAR 25 5700/5705 bear call spread has about a 1:2.5R, with the breakeven at 5706 (the 200DMA).
Housing starts came in surprisingly strong this AM, jumping 11.2%. This is a positive for inflationary pressures; housing continues to be one of the most high-inflation pockets of the economy.
The big macro news right now is the strikes on Iranian vessels in the Red Sea. As well as a resumption of the Israel-Palestine conflict.
I’m looking at oil stocks today. SHEL is looking decent.
A call signal was printed out by my Wave Indicator, plus I’m seeing strong trend support with the Aroon.
Another decent company right now is BP.
No Wave Indicator confirmation, but a nice little crossover on the 9/20.
That’s it for today!
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Testimonial of the day
Russ T. about the Wave Indicator:
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To Better Trading,
Alex Reid
