Stock Market Update

The the bears seem to be taking a break today.

My portfolio continues to have an overall bullish bias, but I am looking at a break of the trend channel by the S&P 500. The market had been losing momentum through May, so a correction is not unexpected.

I am looking at a probable retracement on the S&P 500 to about 1,473, which is the .382 Fibonacci level. Right now the index is holding its 50-day moving average and is trying to get back above 1,500, but it will need some push to get there. I'm not seeing it, so my expectation is for a bit more selling.

Yesterday, I opened a put diagonal on the big cap index which provide me with some profit potential for the expected downside. I am keeping the overall bullish bias to the portofolio because I expect that we will see renewed bullish trend after things sort out. I'll keep selling premium in the front month in the meantime.

Stay awake out there!

Good trading,

Christopher Smith
TheOptionClub.com