Editor's Note

The market is directionally challenged and lacks conviction. After multiple days of chopping around just above support a headline generated short squeeze appeared.

The big short squeeze lost traction at critical resistance. The S&P is facing strong resistance at 2,100 and the Dow at 17,925 to 18,165. Both indexes have failed here recently. The short squeeze was an oversold bounce and it came on low volume of 6.6 billion shares. Today was the lowest volume since April 26th.

Volume dictates direction and a big move like we saw today on low volume shows no conviction. It suggests we will fail at resistance. I do not want to add new long plays only to have them roll over with the market if that failure occurs. I do not want to add new short plays just in case that short squeeze ignited a potential rally. We are already weighted with more bearish plays that will work if the markets fail at resistance. There is no need to add more today. We should only trade when we have a reasonable chance of success. There is no reason to rush into new positions just because the market is open.


No New Bullish Plays


No New Bearish Plays