Editor's Note

While it did not close positive, it was very close. That relative strength along with the sharp afternoon dip and rebound on the S&P could be a positive sign.

The sharp intraday dip on the S&P to 2,600 could have been a capitulation. It was clearly a high volume event from 2:PM to 3:30 and forced the S&P down -55 points. The index recovered 30 of those points on a sharp recovery into the close.

However, the internals were still negative but not as bad as recent days. The A/D line was negative 3:2 but that is actually an improvement. Volume was 2:1 negative but there was one bllion shares less than on Friday.

Afterhours futures have been all over the place from +12 to +2 and back. High volatility is actually a sign of tops and bottoms as it represents indecision. There are buyers and sellers and there is a major war underway. Once the sellers capitulate and the internals turn sharply positive we could have a huge rally. Whether that will be this week or not is the $64 question. Kratos is holding on support at $12.50 after trading as high as $15 in early October. I would not recommend adding to the November option. Our time is expiring on that position. At this point I would not recommend adding a longer term position. We need to see some positive movement before going back into a long position.


New positions are only added on Wednesday and Saturday except in special circumstances.


No New Bullish Plays


No New Bearish Plays