Overview Monday 27 July...

Not a whole lot of interest today. Though the bulls were pushing a bit today, most of the day seemed to be more of a rest from the frantic pace of last week. The bulls are still in charge, but they're just taking a rest. This is similar to the action I was expecting over the weekend, a bullish bias with a less frenzied feeling. A little rest is in order because a correction doesn't have to be a drop. A correction can also be consolidation.

Short-term bias: bearish (I'm still maintaining this as bearish, if only because I'm not chasing)

Intermediate-term bias: bearish (I still think this correction will take us lower, perhaps to 800 on the $SPX and I don't think we're ready to power higher quite yet)

Long-term bias: bullish (I believe we put in meaningful, long-term bottoms in March, and would use the aforementioned correction to increase long exposure)

Pick updates:

So much for taking a rest. F pulled back near support and proceeded to rally about 7%. I figured it would need more time to rest, but I was wrong and I missed the boat this morning. F, being an automaker, is a classic early cyclical play, so those believing we're in the beginnings of an economic recovery would gravitate towards early cyclicals (other examples include financials, homebuilders, and certain tech stocks).

PALM also staged a nice bounce today. I will be watching this bounce for a chance to sell some calls against my existing position.

ALVR, like so many other stocks, is looking mighty extended here, and I wouldn't be buying here. I think it pulls back to the bottom of the range over a couple weeks.



Postions: long DFS August $12.50 puts, PALM November $12.50 calls, and $SPX index fund in 401k