The outlook for Tuesday was for the S&P to rise in an attempt to recover from the recent selling. The market did rise and dramatically so, but first it sold off in the morning in a broad decline that saw over a billion shares traded by mid-morning and investors dumping shares, many of which had just been bought the day before. The market drop took the S&P below 2050 and below the 200 day moving average in a morning plunge. Then news of a possible arrangement to keep Greek banks solvent into the end of July hit the market and investors began to buy. Talk about emotional investing.
More than 4.5 billion shares traded hands by the end of the day on Tuesday. In what was a dramatic turn, stocks rose and closed positive with the S&P back above two support levels, the 2050 and the 2075 valuations. The gain was 0.60%, better than the Dow Index, NASDAQ and Russell 2000 indexes.
Tonight’s market direction outlook is an extended analysis as I look at the day’s activity and try to answer the question of whether today marked a key reversal in the sell-off. The market direction outlook then examines some investing strategies, the market direction portfolio, spy put trade and a couple of other topics. This is a strategy discussion article looking at what I am expecting on Wednesday and what I will be doing. As such this article is for FullyInformed USA Members.
Market Direction Outlook and Strategy Notes for July 8 2015
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