My market direction outlook for today was for more downside as the Bernanke Correction which started May 22 is gathering more steam. This morning the private sector payroll numbers out of the US disappointed analysts to the downside as the private sector created 135,000 jobs which was far below the expected 165,000. In two days the non-farm payroll numbers come out. Meanwhile the signals being sent remain mixed from the economy. While the private sector payroll numbers disappointed the non-manufacturing sector shows continued expansion with a reading of 53.7 versus April’s 53.1, but data shows that hiring is at the lowest level since July 2012.
This morning many analysts are not just wondering if the FED will continue or scale back the bond buying program, but are worried the Federal Reserve really cannot do much more and that in reality the economic recovery will remain anemic at best.
Market Direction Heat Map
I didn’t need a market direction heat map today, to tell me to buy Spy Put Options puts this morning. The heat map is overwhelmingly red with 73% of all stocks declining and only 20% advancing. Among advancers though was Cisco Systems up 1%. Meanwhile though just 39 stocks were setting new lows while 68 were setting new highs. These are pretty tiny numbers though considering the more than 6,000 stocks that trade daily.
Market Direction Intraday and Gold
Gold is up a little bit which is expected on a day like today when market direction is all downhill. The push in gold has put ABX Stock back in the limelight. Investors who are holding naked puts may want to consider closing positions that are out of the money. I closed my naked puts in ABX Stock a few days ago and in the next downturn I will be back selling naked calls and naked puts.
GM Shares
GM Shares are at their highest level since December 2010 and the US Government is unloading 30 million shares plus another 20 million shares owned by the United Auto Workers retiree health care trust are also being sold in a public offering after the market closes on Thursday. Personally I will not be interested at all.
Spy Put Options Purchased
I didn’t get a chance to post my Spy Put Options purchase from this morning but I would think interested investors who are following my market direction comments would have jumped in and bought Spy Put Options put options on the first bounce up this morning which is what I did but with this kind of correction Spy Put Options could be bought at any time in the early morning up until perhaps 10:30 or so. I bought my Spy Put Options this morning at point A where you can see at point B the overbought indication from the Ultimate Oscillator. There were several other periods after I bought which would have been fine including a nice peak at point C. The chart below is the 1 minute chart but you could have also used the 5 minute chart as well.
Market Direction and Put Selling Stocks
I am only taking on small positions and out of the money on the stocks I follow. As the market direction trend moves lower more and more dividend big cap stocks are probably going to fall lower and I want to have capital available for trades as they appear.
Chance Of A Market Direction Crash
Investors remain worried about a possible market direction crash but it is important to understand that crashes are not common events. This remains nothing more than a correction at this point and a mild one at that.
Market Direction Intraday Outlook And Strategy for June 5 2013
Intraday I expect a tug of war between those who are selling and buyers who are trying to get in on what they perceive to be an opportunity for a rally up. Intraday then I am expecting the selling to taper off but the market direction will close lower. Be aware though that the market direction down is now heavily oversold and this means a bounce could be around the corner.
Internal Market Direction Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)
Market Direction External Links