E-mini Executors: The week ahead. 7/18

If you read my blog last week you know that I was moderately bullish and this week I am feeling pretty much the same. I admit that it did not work so well last week and I got a little banged up in some of my options positions. Luckily I recovered nicely with my day trading. Last weeks high volatility was driven by worries over Italy and talks about Spain potentially being next in line with debt issues. Moody's and S&P warned that the U.S. could lose their AAA rating (not good news). Lets not forget Bernanke commenting on QE3 or wait did he (the sooner that we get the government out the market the better we will all be). Not to mention it was the first week of earnings. With all of that said the market held on extremely well. The S&P only lost about 27 points for the week. If you told anyone who manages money that with all of the bad news that came out last week that the S&P would only lose about 27 points for the week they would take it.

On to the week ahead......I continue to talk about the bullish action in this market. One thing that I have learned over the years is that even when you get news (good or bad) until the technicals are broken down the market will shrug the news off and continue on its current trend (unless the news is absolutely horrible or unbelievably good). When the news and technicals coincide is when you see extreme moves. If the current trend of this market would have been bearish when all of the news last week hit the wire you can bet the farm the S&P would have been down a lot more than 27 points. This is why I think that last weeks action was good for the bulls. The long term technicals are still holding on. The S&P tested the 50 day m.a. several times and ended closing above it for the week (bullish action). The Nasdaq, Dow Industrials and Dow Transports all are currently trading at or above their 50 day moving averages (bullish action).

Next week I will be watching all of the markets and see if they can hold their 50 day moving averages. If they can sustain trade above them then I expect a moderately positive week for the market but a failure to hold them will then turn me into a seller of this market and I think that we could start to see a little bit of panic selling come in. Keep an eye on the VIX to see if they can stay below 22.00. This could give the bulls some confidence to do some buying but above 22.00 the bears will feel as though they have control of this trade.

I will be watching all of these things closely along with my other indicators throughout the week. If you are interested in reading my day to day thoughts check out my Morning Brief.

Moving Averages; Black (10 day), Blue (20 day), Green (50 day), Pink (200 day).

Horizontal Lines; Blue (High of the year), Red (Low of the year), Green (Unchanged for the year), Turquoise (Unchanged for the month).