Stocks not merely paused, but also slightly recovered during today's session so far to trade slightly below 2500 currently. Yet it's the corporate debt market that is the reason behind this intraday Alert. It recovered and the bulls attempted to close yesterday's sizable gap. Despite their failure and HYG trading close to its yesterday's closing prices, stocks are trading higher than they were yesterday - in line with the discussed need to pause in their downswing.

However, should HYG continue its recovery attempts, that wouldn't be without consequences for the S&P 500 and it's an open question whether they would lead HYG or lag behind (it's better to be prepared for the worse scenario). While we continue to think that the stock downswing will carry on in the coming days, it makes sense to tighten the trade position's parameters and improve its risk-reward ratio - please see the trading position for full details.

Trading position (short-term; our opinion): short positions (100% position size) with stop-loss level at 2590 and the initial downside target at 2200.

Thank you.

Monica Kingsley
Stock Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care