The market is getting very close to SPX support levels of 2410-2420. That is the level that has held all summer, after the Draghi tapering scare in late June. With options expiration today, you are seeing a lot of delta hedging happening, pushing stocks lower, along with the usual fears that you get after the market gets whacked nearly 2% the day before. The equity put/call ratios have stayed elevated since last week, and today they are sky high.
We are getting close to some decent short term buy zones here and I have gone in small buying the dip. It is very possible that we see another push lower down to 2410, where I plan to add, but I want to have a bit of longs on hand just in case we pop right back up from these levels.
The financial media's infatuation with Trump and the political headlines is helping to push prices lower and bring out the fear, the right ingredients I am looking for when buying. Funny how all of a sudden the market got scared that Gary Cohn was going to resign, as if he was the messiah for this stock market. Tax reform will not get done, it will mostly likely be tax cuts with no reform if anything does get done.
This market has rewarded dip buyers over and over again, it is just a matter of how big of a dip to wait for before buying. This dip should be a bit bigger than last week's, but not by much.
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