Will The Bulls In Options Continue To Be Disappointed This Week?

​Scoreboard: DOW: +.11% , SPX: +.08%, NDX: -.02%, RUT (small caps): -.09% The week ended on a bit of a disappointment with the lack of follow through from Thursday's exuberance. The price action was underwhelmed at the open. Why? Thursday most experts emphatically voiced that markets will trade inversely with rates and conversely with Bonds. Today, 10 yr rates were down 4.4% and Bonds were up over 1% yet markets were flat. Surely a disappointment for bulls. *** Important: The facts did not change this week; only sentiment flip flopped. Friday's early price action prompted a lot of expert to voice their disappointment over the lack of follow through. I guess they expected a straight shot to the moon. These are signs of frustrations and possibly close to the point of quitting. This week: Again next week there will be a standoff in the small caps that is likely to set the tone for the broader indices. There is also a similar situation in the Q's and in Apple. Once again the bulls have the opportunity for a mega breakout from this range bound trade; all they have to do is walk through that door. Until then, selling spreads (iron condors continue to work perfectly). Mid term, markets need to decide how to trade with or against Bonds. Technically, rates (who trade opposite to bonds) look like they are headed lower on charts but this goes against logic since Yellen will be raising rates. This is an important piece of the puzzle and there are no experts these days on the subject (more on this lower). So continue to trade the ranges at hand with a balanced portfolio until we get clarity. - SPY: In breakout mode and bears should worry near term. This week, bulls have the opportunity to follow through with new all time highs. Shorting here needs finesse. If break out continues then 215 should be in site. This is supported by a target in the high 2150 for the SPX.

- IWM: The week ended on a disappointment with Friday's candle. Not only red but the complete lack of follow through. My range this week was dead on. The showdown continues next week exactly where they left off Friday. The small caps will be the indices to watch. The line remains the same. "X" marks the pot.

- IYT: A delayed reaction for the transports and bounced exactly where it needed to do so yet again. But I keep saying that at some point the bounce will not come and down it will go.

No Change in thesis or the variables at play: Fed still raising rates & QE still dead in US; Eurozone still mired but with EQE; China still mystery and now in a bubble; Japan a scary experiment; Geopolitics still scary; Oil depressed but making a comeback, Grexit looming, etc. OIL: Making another run at 62 could be important as rising oil could add downside pressure to markets. Markets still too inconstant with their commitment to either running inversely with bonds or rates. So the Bond market is also important to monitor and how markets trade it. Tickers: - NFLX: Huge breakout on possible China expansion news. We knew that this is a possibility (the 600's) since markets gave it a profitability pass on earnings for the sake of global expansion. They had taken a step away from it for a while (like Amazon) but now back in full force.

- MCD: : Since last post it bounced. But range tightening with lower highs and higher lows. Showdown coming with 2targets. I vote down. So debit put spreads would be a decent low conviction trade.

- WYNN: No touch. Bounce didn't hold and now trading a nasty descending channel. Needs positive headline. But from where? Technically not conducive for long positions yet. Major disaster can bring 80.

- CMI: If can break out of descending channel, it has 155ish as potential target. Else it's reverting to lower end of channel. Nice recent trend tho. The option mkts agree and show a range of 125/145 for June.

- ICPT: Mid April we said that a break above 295 can fuel a big rally. Here we are at 307+. Much more is still available.

- ABBV: Mid April we mentioned its breakout mode. Still a breakout candidate. Monday check an entry point.