Obviously an ugly day in the markets, I have been expecting something like this to happen but in truth not today, not the day before a Fed meeting. Basic materials (UYM) real estate (URE) and financials (UYG) saw the worst of the selling, with gold (GLD,) fixed income (TLT, AGG, SHY) fairing best.


This selloff today was hard on large caps and we saw weak bounces off of important moving averages in names like AA, JPM, while other names closed right on the MA and made those support/resistance buys tough (BAC&AET for example). I am not expecting real ugliness tomorrow ahead of the announcement but be well aware of the MA’s and today’s lows in anything you are trading. Homebuilders (XHB), energy (XLE), industrials (XLI), technology (XLK), consumer discretionary (XLY) and retail (XRT) all closed above the 20 day MA and you can make the argument that this is bullish or that there is more work to do on the down side in important sectors. I think there is more work to do. We could get a bounce in the SPY back up to the 20 day MA (119.60) but they are going to have to do some real work to keep SPY above that level and I that we are headed for a test of the 50 day MA (116.17).

This selloff comes at a tough time because tomorrow is Fed day which is usually marked by low volume and increased volatility after the announcement. I often take the day off because it can be such a pain but I will be in tomorrow. There should be some residual action in the morning as people square up positions, but don’t press too hard before the announcement; there should be plenty of opportunity later this week to take advantage of this sell off if it is for real.

The following ideas could be actionable tomorrow but be careful of light volumes and whippy action. Use reasonable stops and when buying pullbacks don’t catch a falling knife. Look for the stock to come into the level vertically on light volume and no news. Allow the stock to break the level and buy it on the way back using the low of the candle as a stop. Also only try this the first time around. The second test of the MA is subject to failure.

a 37 long

abx 42 long

aem 62ish long

nem 54 long

amgn 57 short

bg 56 short

hum 43 short cover before the 200 day MA 41.59

agu 57.09 reversal/support buy on 200 day MA

amg 78.21 reversal/support buy on 50 day MA

apc 66.35 reversal/support buy on 150 day MA

bbt 31.23 reversal/support buy on 50 day MA

clf 65.14 reversal/support buy on 50 day MA

clx 63.22/63 reversal/support buy on 50 day MA

cni 58.32/58 reversal/support buy on 50 day MA

cnq 73.43 reversal/support buy on 50 day MA

ilmn 36.05/36.02 reversal/support buy on 150&200 day MA

jbl 15.38 reversal/support buy on 150 day MA

luv 13.02 reversal/support buy on 50 MA

nwbi 12 reversal/support buy on 20&50 and previous resistance day MA

rax 18.07 reversal/support buy on 200 day MA

wmt 53.23 reversal/support buy on 150 day MA