Fading Into Friday

WEBINAR: VIX On Five Highly Active Stocks, Weds., October 3 at 6pm ET w/Mark Sebastian and Jill Malandrino. CLICK HERE FOR INVITE AND TO REGISTER.

Tuesday was a great day to be on a plane. Rallies were being sold, dips were being bought, and in the end we were left with what could be best described as volatile chop. We've been cautious on the long side after the extreme $TRIN reading we saw last Tuesday and as it works out Tuesday's high in the S&P is still intact. With ECB rate decisions on Thursday and employment data on Friday I'll be looking for capitulation into either 1450 or 1425 and I'm looking to fade the current trend with a bearish bias into 1425.

ES Daily
Source: Trade Station


When you're faced with a market like what we saw on Tuesday where typical indicators are all over the place, use correlated markets to help with direction. Crude is a good example of a risk-on correlation and we can expect this market to be volatile with reports due out Wednesday at 10:30 AM.

CL Daily
Source: Trade Station

If crude starts to rollover, and I am looking for it to take out the September 26th lows, look for lower prices in the indexes. You can day trade around these signals and keep overnight positions light until we have more of a confirmation back to S&P 1400.

OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits.

John can be followed on Twitter at twitter.com/johnfcarter
At the time of publication, John Carter held no positions in the stocks or issues mentioned.