The Short-Term Bear in Control, Still Buying the Dips

The long-term trend is up for the major index ETFs, but the short-term trend is down. The short-term volatility expanding the action in the market remains negative.

The percentage of stocks above the 20-day EMA for the S&P 500 ($SPX), S&P MidCap 400($MDY), and S&P Small-Cap 600 ($SML), has sliced through to less than 40 percent. This would be short-term bearish.

As I said yesterday, I am taking this as an opportunity to buy-in best of breed stocks. Run Tradespoon Bulls Tool to find these trading ideas. I am only buying 25-30 percent of the total allocation of these best of breed stocks. If the market breaks $197.50 on the $SPY I am looking to add to my portfolio.

For those of you that are option sellers the last two sessions have been ripe with opportunities to sell either naked options or credit spreads, as well as some decent covered writes for you stock traders. The market looks poised to continue to challenge the downside. That only spells opportunity at this stage.

See you next time at the Corner!