Profit Taking Will Set In – Late Day Selling Will Be A Sign To Buy Puts

Posted 9:40 AM ET - AAPL disappointed and the Fed was more hawkish. The market will have a hard time rallying without tech FB was good as expected. AMZN after the close Once the mega cap tech have reported, profit taking will increase and bears will get more aggressive Whatever gas is left in the tank will be burned this week. The market has been resilient, but it looks tired. Stocks that are breaking out pop early and then settle back. Even when the market bounces, they do not challenge the high of the day. This tells me that profit taking is setting in Basic materials and industrials are over-extended and I expect to see weakness there. These sectors have been the leaders and the macro backdrop does not support the move SPY support is $207 and it could be tested today I am expecting an early low, a bounce and then more selling with a new low after a few hours of trading. I will focus on the short side after the bounce Central banks have stopped easing for now. The BOJ did not inject liquidity as expected ECB fired bazooka last month and they are downplaying need for more stimulus PBOC will take its foot off the gas now that PMIs and trade are improving slightly FOMC statement was more hawkish Easy money sparked the rally and that catalyst is gone Earnings have been OK, but valuations are high Corp buy back announcements are low for Q1 due to lower cash flow. Level not seen since 2012 I don't see the sector or the catalyst that is going to push us thru. Profit taking will increase in back half of Q1 earnings I am looking for a pullback to $202. I will buy some puts and hold overnight if market makes a new low after 2 hours of trading If the market bounces and recovers, I will stick to day trading and wait for signs of exhaustion Open on high, close on low and late day selling are warning signs. Also need to break $207 . .

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