Overview Friday 31 July...

Friday was a somewhat eventless close to the month. The broad indices were more or less flat for the day to cap out a very bullish month. So August starts on Monday, and I expect to see some start of the month inflows. At the start of the month, a lot of money tends to rush into the market as IRAs tend to put money into the market. I do think the market is starting to peter out and I expect a further pullback coming up. The action from this week feels panicky and felt very manipulated to go with the end of the month.

Short-term bias: bearish (I'm still maintaining this as bearish, if only because I'm not chasing, but I do believe we had a buying climax)

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:

I did a little housecleaning in the list. I've removed ALVR and RIG.

ALVR had a dreadful week, shedding about 20% following a weak quarter and the resignation of their CEO. I don't like this stock's chances of holding support, and I am removing it from the watchlist.

As for RIG, I simply don't like its setup anymore as a short. It rallied above its 200-day EMA and thus far has successfully held that level. I think it holds support here and I don't see it as a viable short right now.

The early cyclicals were the big movers today, with BAC, F, GT, and MAS rallying hard. Pretty much everything else was flat.



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