Regardless of stocks appearing to have run into headwinds in today's premarket trading, and yesterday's bulls' attempts to take out Thursday's highs, we remain of the opinion that the stock rally is likely to roll over to the downside in the coming sessions. It's that both the price action and corporate credit market appear to be stalling. Just to be on the safe side of the developing move lower and not be taken out by a quick fakeout above 2650 should it ever come, we decided to take advantage of the nearest resistance, and broadly move our stop-loss order there. Again, that's regardless of the futures moving much in our favor (below 2615 as we speak).
This is happening against the backdrop of surging USDX, plunging oil and commodity currencies (plunging AUDUSD and surging USDCAD). The S&P 500 futures gave up much of their overnight gains to trade close to unchanged when compared to yesterday's closing prices. It's highly likely we're in for a risk-off day later today.
The stop-loss doesn't have to be reached - we'll manage the open trade flexibly and according to both the both incoming technical and fundamental factors - please see the trading position for full details.
Trading position (short-term; our opinion): short positions (100% position size) with stop-loss level at 2750 (we decided to move it above the bearish gap that the bears couldn't close on 13th March) and the initial downside target at 2200.
Thank you.
Monica Kingsley
Stock Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care
