Minor selling today

S&P futures fulfilled a 10 point day session range and then the bulls promptly stepped up near the cash close. We could finally see a decent shakeout tomorrow.

Relax :)

Conflicted on direction

S&P futures are grinding back up after filling the gap from yesterday's close. I'm a little conflicted on direction here. On one hand, my daily chart indicators are super stretched and look ripe for selling. Various put/call ratios that I watch are looking supportive of some downside. SPX tagged 1310 right at the cash open (top area of a high volume zone) . Gold has cracked 1620 and is threatening to crack 1600 on a closing basis. Euro futures are flat to slightly negative.

On the other hand, short term indicators are not giving a ripe for selling setup. In fact, they have room for more buying. Rydex data is showing a push into the short side (as of yesterday) that looks relatively bullish. We haven't seen a heavy volume push in futures on the daily timeframe yet. And to top it off, as I look around I get the impression that a lot of folks are looking for a top here.

10year futures are right at the bottom of the range they were in for 4 weeks. This could be taken both ways. If it holds and bounces, it's most likely bearish for the SPX. If it cracks, it's most likely bullish for the SPX.

10yr Futures Daily

Overall I still think we see a shakeout... if not today, then tomorrow. I'm trying to be patient on the short side.

Is That an Island or a Floating Continent?

Gator's Chart of the Day: BWLD

If this is an island it's the largest one I remember; about 6 months long.  The book says this stock should be trading lower if it is an island reversal.  Maybe it's a floating continent.

BWLD usually does well in football season and in case you hadn't noticed the NFL has already played pre-season games and college schedules begin 2 weeks from Thursday.

Since the gap down the stock has made higher highs and higher lows.  That sounds good if you want to get long.  The P/E is still pushing 20 but analysts maintain a target price of nearly 86.

BWLD Weekly Chart

The weekly chart shows the stock sitting on a long term trend line so we could see a continued move higher.

The Trade
Since the market is holding up I think a position could be started now with a stop below the long term trend line just under 70.  If the analysts are right about 86 as a target, that presents a risk of about 4.3% down and a reward of 18% up.  It probably won't be a fast trade.  Might take all season.