Intra-day movement (VIX)

Today’s markets seemed like a case of deja-vu from Tuesdays price action as we open near 52 week highs and sold off for the remainder of the morning, finding some support at yesterday highs. And similar to Tuesday trading it was difficult to initiate long with a high probability of follow through but we could not short aggressively because of the overall strength in the markets.

In the afternoon we were able to hold support at Wednesday’s high and started to make a run back to test session highs near the 124.00 level. Which provide some interesting long opportunities in stock that have been strong throughout day, such as BBT, MET and COST (from Keystone stock list).

As far as trading goes the VIX did present good clues as to markets direction. As the VIX gaped lower on the open (coinciding with the market opening at its highs) we subsequently pushed higher, but could not continue lower as the VIX tested and held its first 15 min support area giving legs to the continued uptrend (bearish) through out the the morning session.

As we look at the afternoon session the VIX had the same type of move, just on the long side. As the afternoon continued the VIX formed lower and lower swing highs giving way to the afternoon rally. Even though the SPY and the VIX opened and closed near the same level, paying attention to the directional movement of the VIX could have resulted in taking advantage of some intra-day movement in this very stock specific market.

A few things I did notice in the markets today was the relative strength in the financial sector and weaker price action from the technology (specifically semi-conductors SMH) and the energy sector, which could be the beginning of leading sector rotation (but we need more time to see if this is the case). If the financials with tech and energy could start to push higher consistently I think we will have no problem getting above the 124.00 resistance we have in the SPY.

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