Is the selling over? Or just a pause.

The charts below illustrates the rebound we have seen since last week's "correction", but I am not convinced the selling is over. Jim Brown's subject line in his Market Wrap last evening says it all: "calm before the storm". There seems to be a lack of conviction between the bulls and the bears, and while the VIX has dropped significantly, I would like to see it continue to fall to a more reasonable level. I do not think this is time yet to re-enter the short term VXX or SPX weekly trades. This weekend we have the added three-day weekend risk on top of what I see as an undecided market, as the market is closed Monday for the U.S. President's Day holiday.

For those who trade the SPY monthly Iron Condor, I have been looking setups for March this week and haven't seen anything yet that appears to be a good entry play. I will look further this afternoon, and if I see a potential trade that looks decent, I will post an entry recommendation. Today is 30 days until March expiration, so if there isn't an entry today, we may have to pass this month's cycle. Again, better to pass than to throw money into the market just to trade.

SPX 6 month chart

VIX 6 month chart

Upcoming economic news, beginning tomorrow, is summarized below:


8:30 am Jobless Claims

8:30 am Philadelphia Fed Business Outlook Survey

8:30 am Producer Price Index

9:15 am Industrial Production

10:00 am Housing Market Index


8:30 am Housing Starts

10:00 am Consumer Sentiment

Monday, February 19

Markets Closed; US President's Day Holiday


9:45 am PMI Composite Flash Index

10:00 am Existing Home Sales

2:00 pm FOMC Minutes


8:30 am Jobless Claims

10:00 am Fed's William Dudley speaks

11:00 am EIA Petroleum Status Report


10:15 am Fed's William Dudley speaks

1:30 pm Fed's Loretta Mester speaks

As always, stay keen on your risk management and trade carefully,

Dot Hazlin