Good evening. By all measures the market is overbought, but as the saying goes it can stay overbought longer than you can stay solvent. It will be interesting to see how Q3 ends and what happens as we head into October. It appears to me that there is some major window dressing going on until Q3 ends and I believe there is an imminent pullback on the horizon. But we have to let price action guide us. I do not have plays to release tonight but have provided three set-ups below for those interested. These may or may not make it into the model portfolio.
DIA: There has been a rotation into large caps that has the signs of unwinding as we head into October. I like DIA short at current levels or on further strength in the stock. Immediate targets are $106 and $105.50.
STT: The financials are trading terrible and if there is a broader market pullback STT should print $36.25 fairly quick, which is about -5% lower than today's closing price.
FWLT - The stock has pulled back to its rising 20-day and 50-day SMA's. I would target a move back up to its 200-day SMA.