Gearing up for Rocky October?

2016年9月13日

Although today's Redbook showed slowing growth for retail, what I think is setting us up for a rocky October is the potential for a Sept rate rise. Although traders are pricing the probability of a rate increase higher in December than September, considering the markets have rallied for a while now on expectations of rates continuing to stay low, a surprise rate rise, combined with other economic uncertainties in October, could set us up to set a bigger retracement from August highs. Albeit, the probability of a rate rise is low.

On the technical side, we are trading below the 10 Day MA, and on a strong approach to the 100 day MA. Today's high attempted to break the resistance level at $214.63 (76.40%) but failed. The next resistance is at the 100 day MA slightly below $212, then right below is the 50 day MA, this might give us some support, but could break if the fed raises rates. If our support area around $212 gets broken, the next target would be the 200 day MA around $206.00. Momemtum on the MFI is continuing to trend bearishly, for this reason, I am looking to be short with a take profit at $206 if $212 breaks, or the FED raises rates rates. The proportionate SL for this trade is $220, however I would to trigger a stop loss if the prices rises back above the 10 day MA.