January 27 - Market Commentary

With the recent slide in the market and headlines like "Is this the end of the Sucker's rally?!", people are wondering what happens now. I've been a long time advocate that this market has gone up too far too fast and needs a correction, but I am not predicting a crash in the scale of what we saw in late 2008 and early 2009.

Below is the daily chart of the S&P500, with RSI and MACD indicators:

Right now the decline is within the uptrend channel and has the same characteristics as the recent corrections within the channel. We are now seeing some support at the trend line with MACD ticking upward while RSI is below 50 indicating an over-sold position and a possible buying opportunity. I am not too bearish on S&P at this level, but will look to see if it will break the channel or bounce off of it.

I will look to initiate a long position, by buying shares instead of selling puts as I think the upside is stronger. I am considering SPY (S&P DEP Receipts) or SSO (Ultra S&P500 ProShares).
This will be a longer term trade and I will look to position myself for possible downturns.