Greetings.

S&P 500:

Trading near its 50-day SMA (4239.90)

This time, things do feel different to me, and since there may be long positions in individual names already, I am not advocating considering buying the 50-day SMA this time. Instead, I want to see how the market trades off of it, and will then analyze levels to potentially exit long equity positions. I wouldn’t want to be any longer at this time.

We will consider exiting long equities on bounces (further analysis required / additional time passing required to see how this move lower is digested today).

Bonds:

TLT trading near $151.19: Bonds are bid today with this equity meltdown. We will stick to our stop-loss levels of the second daily close above $153.16. Should the stocks find a bid near the 50-day SMA, bonds could cool down.

I don’t like the fundamental factors facing this market at this moment, and the Covid Delta variant is beginning to make the rounds heavily in the media. It feels reminiscent of the beginning of last March (2020).

Let’s not be emotional, and see how this move lower today gets digested.

Thanks for reading today’s Stock Trading Alert. Your readership is valued and appreciated. Have a great afternoon!

Thank you,

Rafael Zorabedian
Stock Trading Strategist