I hope you read yesterdays blog and took action. It was nice to have a green day in the markets but as we talked about yesterday some long term trends have been broken and we are now in a very different type of market. Buying the dips is a much more risky approach, especially if you plan to hold it overnight. In this new environment we want to be selling the rips until we can reclaim the upward trend with conviction. After a 7 year run it could take awhile for that to happen.
We had some mixed earnings after the close from INTC. Globally we are seeing markets sell off as China officially moves into bear market territory. Oil has been the proverbial canary in the coal mine and if we continue to see deterioration in the price of oil we are going to see some large companies go into default.
I don't think anyone knows what type of contagion will spread if China continues to decline and oil continues to plunge. We need to see total capitulation before we can start to heal the damage that occurs. We will still have viscous snap backs in the market but they will likely be much shorter in duration signalling the change in market sentiment and a move away from the buy the dip mentality.
There were some great short term trading opportunities and playing the volatility still remains a great way to weather this storm. Markets are closed Monday in observance of Martin Luther King day, use that time to reevaluate current positions and establish a plan of action for your long term portfolio.
I remain focused on UVXY XIV UWTI TVIX
I am also paying close attention to the UUP and Gold.
I will resume "stocks on my radar premarket" when the market dynamics change.
This doesn't mean I am not trading individual equity names but if you want to see what I am watching you will just have to join us in the Traders Den. http://www.chatzy.com/TradersDen
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