How Many More 100-Point-Swing Days on the DJIA Can You Take?

NEW YORK (TheStreet) -- The stock market on Monday was marked by a day of volatility. All four indexes were down the majority of the trading day only to find buyers come in at the lunchtime hour and turn the averages green.

By the end of the day, the DJIA was up 22.02 points to close at 16982.59 after being down nearly 100 points at its low. The S&P 500 was flat on the trading day at 1978.91 while the Nasdaq was lower by 4.65 at 4444.91. The Russell 2000 was down 5.22 points to 1139.50 and is now down over 2% for the year to date.

The S&P 500 Trust Series ETF (SPY) volume came in at over 69 million shares. Early on the volume was greater than normal, but as the day wore on the volume slowed considerably.

It should be noted that this is the first week since March-April there is a net long position in the S&P index and e-Mini futures. Thus the U.S. stock market divergences continue to be the story in 2014.

The Russell 2000 was down last week another 0.6% and is now down over 2% for the year to date versus the S&P, which was flat last week and up 7% YTD.

The Select Sector Utilities ETF (XLU) was up 1.4% on the day and is now up 14% YTD. Would you rather be long the Russell 2000 YTD or the XLU?

Energy inflation, measured by the Energy Select Sector SPDR (XLE), was up 0.9% last week and 12.8% YTD versus the Consumer Discretionary Select Sector SPDR (XLY),  down 1% this past week and flat YTD.

Commodities continue to have a fantastic year relative to the Russell 2000, housing and the U.S. consumer.

The CRB Food Index was up another 0.9% last week to 19.7% YTD. That is inflation accelerating and contrary to what the old Wall Street pundits and the Federal Reserve are telling you.

I will continue to pound the table on this stock market and the economy. The stock market and the economy are on a collision course and the stock market will not win.

In sum, we continue to trade opportunistically at www.strategicstocktrade.com.

There are always trades to be made from the long side and short side of this market. The most important factor is to not get caught up in all the bullish and bearish talk on Wall Street. Have a trading plan and execute that plan accordingly.

On Friday, we mentioned that we went long Turcell Iletisim Hiizmetleri ADS (TKC). We sold that position on Monday at better than a 2% gain. We went long Qlik Technologies (QLIK) and sold that position early on at better than a 1% gain. The Siliconware Precision Industries (SPIL) short was covered at a better than 1% gain also. This is what having a trading process is all about.

At the close of trading on Monday, we initiated a new short position in Ampio Pharmaceuticals (AMPE).

At the time of publication, the author was long INO and short AMPE., although positions may change at any time.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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