4/16 Market View Update

This week (so far) has proven interesting. The market has rallied back almost to where it was pre-sell off. SPX is back at 1862, after rallying 2.4% in 3 days.

Here are some of the points I made about the market over the weekend.

• SPX would bounce Monday (correct)
• Trading would be choppy (correct)
• Volatility (as measured by the VIX) would rise (incorrect)
• Need a good catalyst to turn market around (correct, http://www.bloomberg.com/news/2014-04-16/u-s-stock-index-futures-climb-as-yahoo-jumps-on-earnings.html)
• Value/Dividend over Momos (correct, http://blogs.marketwatch.com/thetell/2014/04/14/sp-500-will-recover-not-so-much-with-momentum-stocks-goldman-sachs/
• Overall correction to 1800 and then 200MA (to be determined)

Although this has been a nice little rally, that I missed out on by not placing any bounce play trades, I still think the overall direction is down over the next couple months. This happened last Tuesday and Wednesday too before the markets careened downwards that Thursday and Friday. Because of the recent catalysts mentioned in the article above, I think it is more likely that the market pauses here rather than has another leg up or down. More news is needed to move us big in either direction, since the technicals have recovered to a degree.

I think that BIG catalyst to move the market, especially the momos, will be NFLX earnings on April 21. This stock has sold off -22% in a month. It's been beat to hell and back and is ripe for a sharp move higher. Of course, since this stems from earnings, it could also drop the bottom out of NFLX.

Right now is not an opportunistic time to be trading the markets: things could go either way... or both ways in the course of a day, like Tuesday. I'm still looking for another short entry on GMCR for the rest of this week and into next week, but that's about it.