Today’s Monday start doesn’t seem to be a good one…a Red Monday. Just look at the world-wide indices to see how bad it is. It’s the color of red in it’s full form and it’s not beautiful.
India down roughly 3.8%, Hong Kong by 4%, Japan by 3.3%, China over 1.5%, Singapore by 3.3% and Europe was trading 1.5% lower.
Though on one hand I walked to the bank smiling after closing my RUT Iron condors, I have all the reasons to worry tonight for my income portfolio(s). One good thing is that I had converted major portion of my portfolio into cash last week to take advantage of intra day opportunities. But I still have considerable amount invested in. I shall be ready to pull triggers as soon Mr. Market opens his mouth and start settling for the day. Though I am not so much concern about Dow or S&P as I am only slightly negative delta on these, I am concerned for $BKX index which is very near its 50days MA and may hurt my positions.
There are couple of things that one needs to be ready. Let me share my perspective:
- 12,000 is key psychological point for Dow and make a note, that is also key fib 68.2% retracement. if that’s gone, look for further fall, 200d MA is 11,782
- Pretty much the same story on S&P 500. 50d MA support has already broken. 1373 is important fib area and below which, look for support at 200d MA at 1344.
- Nasdaq is no different. 2338 is an area to be watched for support followed by 2286.
- My favorite income generator Russell 2000. Key support area of 780 was broken already. Key Fib retracement support area is at 769 followed by 200d MA support 746
Above points are by no means exact points for market to turn direction. As always with any technical analysis, take it carefully. The futures seems to indicate that Fib 68.2 retracement for all of these will be broken.
I am in no mood to fight with market. Let it open and I will embrace it with all my trigger points being ready for either direction.
Profitable Monday and profitable trading, OptionPundit