Heading into a big OPEX here is where we stand:
- There is a gap below 4177 on the S&P that every technician is eyeing
- There is the 200 day moving average at 4323 that every investor is eyeing
- There is the fact that the market topped this week exactly at the 200 day moving average that has every investor thinking "top!"
- Today was the lightest volume day of the year, creating the false perception that light volume is a bearish signal, when it is, in fact, very bullish
- We have a $2 trillion OPEX (option expiration) taking place tomorrow
Every single one of the above mentioned lays of the land are an excuse for investors to sell.
This is in addition to the gigantic wall of worry I've detailed countless times here in weeks and months past.
Despite these seemingly worrisome facts, we just had the lightest volume day of the year.
There is no liquidity in a move lower.
Why?
The selling has already taken place from January-June.
Markets gravitate towards liquidity.
That liquidity in the market is from higher levels, as shorts cover, cash is deployed and investors add to their lackadaisical equity allocations.
The next big move is higher as the market seeks out that liquidity in the days and weeks ahead.
Plan accordingly.
Goodnight.
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