What a mess… The Dow is challenging an all-time high based on nothing.
There’s nothing to get excited about. Even Money Flow indicators are telling us traders have no idea what to think any more. It’s not often MFI will just flat line.
When the bottom falls out of the market… and it will, we will fall hard. In my opinion, the Dow could easily pull back to its 50-day moving average around 17,900 before long.
It’s why I’ve asked that you reduce overall exposure to the market until we really begin to see sustainable direction. At the moment, we continue to hold the SLV January 18 call, the KB July 14 put, the XLY June 76 put, and the DE June 85 put.
I am finding a short-side opportunity in American Express (AXP) these days.
After a recent run from oversold lows, the stock has found overhead resistance just above $80 a share. If it fails here, the stock could pull back near $76 a share. That said consider buying to open the AXP July 2015 80 put up to $2.45.
Not much makes sense in the market right now. We are just flying around aimlessly. There’s little direction. There’s a great deal of chaos. And until we see some sort of “sanity,” I ask that you risk very little at the moment.
Take good care…
Ian L. Cooper
Inside Value Trader