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Stocks can't hold morning gains

HAVING TROUBLE PRINTING?
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The major market averages were not able to hold this morning's gains and have turned red. Today's trade at $1,080 in the S&P 500 (SPX.X) has this widely followed market average trading right on its longer-term bullish support trend and giving another sell signal today. This action looks bearish and the current bearish vertical count of $1,000 looks very much in play.

S&P 500 Chart - $10 box

In yesterday's market monitor, I turned bullish on the SPDRS and thought a good risk/reward trade to the upside was at hand and thought that short-term bulls could get a trading bounce out of today's productivity numbers. It looked good at the open, but as the sessions has progressed, sellers have taken control. In the market monitor, I felt it best to cut losses at $1/share in the SPDRS (AMEX:SPY) from yesterday's profile and instead look short/put shares of Citigroup (NYSE:C).

The S&P 500 now looks vulnerable to the $1,060 level should we see a clear break of bullish support trend with a trade at $1,070. That doesn't seem like "a lot," but inch by inch, this broader market average continues to sink lower and should continue to have traders playing some defense and only looking for very low risk trades with stops close by for those stocks/equities they are trading long.

Jeff Bailey
Senior Market Technician
Option Investor

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