Trades Setting Up
Yesterday’s ISM number caught the market by surprise. A drop in manufacturing in the face of all the easing going on around the world is startling. The bulls have tried to capture the 1420 level on the market but significant selling pressure remains. While the market is only down slightly on the week, it feels like much more given yesterday morning’s move higher. I’ve played the bullish side with some success over the past 3 weeks, and I am now turning my focus to the bearish side. With the XLF, XLE, XLB, XLY, and XLK all trading below the 7 day moving average and bond prices turning higher the chances of seeing strong selling are growing. I am going to let the day play out and set up a trade into the close. Eying TBT, CAT, and XLY short.