Capitulation – AM Watchlist 12.16.14

By LucciStaff

By LucciStaff

The SPY yet again finds itself trading lower this morning after failing to hold $200 through much of yesterday’s session. The market looks to be a polar opposite from what we saw back in October. Oil prices continue to take a nose dive and bonds are rallying. For the time being, it is clear that money is repositioning itself within domestic markets, and shifting into the bonds so be sure to keep an eye on $TLT. Meanwhile, the Financial Sector is relatively quiet this morning although $BAC and $GS are setting up to gap down.

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The High Flyers have followed the path of the $SPY this morning and are set up for a strong gap down. Volatility levels on options should be extremely high off the open, it’s going to be important to wait out the wild activity early. $AAPL $LNKD and $AMZN have been the strong names within the High Flyers, so it might not be a bad idea to look to start positioning towards a long swing position. The Social Media names continue to show more strength than the market itself.

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Overall, sitting out doesn’t seem like the worst idea. Depending on how the big institutional portfolio managers play this one, we could see some more downside action. We could also see a whole lot of nothing as we approach 2015. We do expect an afternoon recovery, but if recent sessions are any indication, it’s not expected to provide too many tradable opportunities. Stay light, and bias free, will be the way to go again today.


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