First Win For The Bears In The Options Market In A Long Time

Scoreboard: UGLY Friday and the first clear win for the bears in a long while. The only moral victory is that Apple closed barely green. This week markets have engaged in a game of sentiment tug-o-war; today bulls fell in the middle pit. Monday, it is very important to see if they can recover their footing or markets will be tested hard. The session open was red but was held together by a spike in Apple on news of it replacing AT&T in the DOW. Alas, Apple could not hold its greens. In fact it went red in the last hour of trade. It finally eked out +.15%. For the week, markets closed red. There were a few victories for bulls for tickers like Google which finished the week green even with the bad Friday close. Week ending 3/13 has the chance for a good base on which markets can find footing. The sentiment tug-o-war continues so the outcome is uncertain. Bulls have been shy while crossing to recent highs and bears seem uninterested in causing a giant correction. Thoughts: * WHY did markets freak out? It is important to know why moves happen before trading the action. Today, consensus is that markets took the good economic jobs news as bad news. Traders believe that now the FED will need to raise rates soon. So it's the ol' Good news is bad news argument. Traders are correct in fearing the rate hike. BUT a -1.5% drop is not too bad if this would be it. However, this is merely a preview of more reactions: 1) once the FED actually confirms today's fears (removing the 'patient' term from their statement) and 2) Once the rate hike date is actually set. * There is also the added mathematical downside pressure from higher rates: Higher rates = Less borrowing for 'fengineering' (financial engineering). Financial engineering has been a giant part of recent price appreciation in all names including Apple. * A down move in TLT and an up move in TNX usually are bullish markets. But just yesterday I said that I expect that this relationship breaks down as Fed starts hiking rates. Otherwise markets would be to the moon from here. No one knows how often this will occur and how long it lasts each time. So now it's sentiment becomes even more important. => this week I started saying: sentiment is starting the turn. * For the past few weeks I've noted almost every day that bulls are too hesitant to take the new highs especially in the small caps even when the bears were not even on the battle field. * Apple could not hold its pop several 'experts' saying it's sign of top. Next week may 1) confirm it and whack it goes or 2)they surprise us with flying car and BOOM to new highs. * Today a CNBC expert said that a 'pullback is healthy for our markets.' The problem is that it's the same person who said last week that Nasdaq 5000 will be bullish for even more upside from there. Trade your own thesis; tune out the noise. * The good news today is that small caps were stable for most of day after initial drop. * The Fed is in a pickle here while trying to raise rates while the globe is dropping theirs. No one knows the impact of such major disconnect. Sort of like the accident is worse when two cars are traveling in opposite directions as they impact the speed is almost double. Variables: * TLT: Broke down -2% like we said it could and almost reached the target price today.

* TNX lid? No. It broke out today (+6%) and is on its way to the target we set this week.

* EQE: 3/9 start & DRAGHI SAYS QE WOULD CONTINUE BEYOND SEPT 2016 IF NEEDED. EQE still has no duration target = data dependent * OIL: back below 50. * YEN: Down it went. Ranges: All the ranges are playing out within our expectations with regards to open interest AND trends. Update to follow. peeking into next week: SPX: 2100 still is a magnet (resistance on the way up). more resistance between 2100 and 2120. Stronger resistance at 2125. Anything higher is pure resistance. 2075 small support. same for 2065 BUT both can exert downside pressure as well (small magnets). 2055 small support. Best support is 2050. Anything lower is pure support each though smaller than 2050. So ideally iron condors based on today's data would be lower than 2050 and higher than 2150 if i can get the 8% yield target that i personally have. - SPY & SPX: Droop continues and on heavier volumes so the conviction selling is growing. Not a good sign. Two weekly candles in a row for SPY. - NDX & QQQ: Nasdaq 5000 come and gone. Red weekly candle. - RUT & IWM: gave back the 1240. Retested the lows in TF until they finally failed. The previous tests were warning signs indeed. Tickers: - GOOG: Sentiment changed today. It didn't outperform like it had been. Signs of bull exhaustion.

- FB: Back to even in my short yet i didn't take the opportunity to exit. Why not? Because my thesis is now so close to fruition. Price action is close to breaking support at 79.5ish that could bring it to 76 fast. Plus it happens to add protection to my longs.

- AMZN: This week's short idea is working nicely.

- AAPL: Testing its luck at my orange line.

- LULU: I downgraded LULU two days ago and today Goldman Sachs lists it as a sell and down it went. Congratulations. More downside possible but booking some profits here makes most sense.

- TSLA: is now at my my breakdown trigger. 180 target

For a full recap of this week's outlook, check out the video below: