Friday was definitely one of the more volatile days, offering valid signs for the bulls and bears alike. Such was the case also once the closing weekly and daily prices with volumes became available.

Namely, it has been the intraday dynamic between the S&P 500 and the HYG ETF moves â€" when stocks moved to just above 2980, high yield corporate bonds haven't been at their daily lows. Kind of dragging stocks higher to close with a long lower knot, that's the most bullish observation that can be made on that day.

On the other hand, the volatility is still elevated after having broken out of its bullish pattern, making it unlikely that it would move lower this fast again. Also, the momentum of Thursday's waterfall selling is making it suspicious that it would be a one-day event, improving market breadth notwithstanding (advance-decline line is making a bullish argument).

As you can see, the very short-term outlook is rather mixed, but the potential for sizable introday swings of last two days' calibre is there.

The medium- and long-term outlook though is clear, and it's bullish, making it essential to close the open short position and rejoin on the long side at an opportune place.

That's why I'm sending this brief Alert with the Trading position section bringing you the details well ahead the Asian session. On Monday, I'll post the flagship Stock Trading Alert as usually, which will deal with the balance of forces post-Friday.

Trading position (short-term; our opinion): short positions (100% position size) with stop-loss at 3130 and binding take-profit at 2965. Once the binding take-profit is reached, a long position is simultaneously opened, at market (which is for simplification purposes roughly the 2965 price level), with stop-loss at 2570 and the initial upside target at 3220.

Thank you and have a nice rest of the weekend.

Monica Kingsley
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.