As we wrap up this volatile week, the market has definitely shifted to risk-off mode. The S&P stabilized today above 2050 and the next battleground level will likely be 2040. Should this support fail, the S&P is very likely to head toward 2000 and its 200dma.
As in every correction, now is the time to be defensive, reduce long exposure, increase cash, and even look for shorts.
Here are the top five setups I will be watching tomorrow.
BIIB - Ugly daily chart and pretty much a straight down 60 point drop over the course of a week, it now seems ready for an oversold bounce toward 450
DIN (SHORT) - In the process of rolling over, should the 104-105 area fail it's going toward 95 and possibly lower
MERC - A rare example of a stock consolidating well under these market conditions and maintaining strong relative strength, now needs to push through 14.80-14.90
PZZA (SHORT) - Toppy chart with a possible head and shoulders pattern, should 60 fail, measured move would be to 55
SNCR - Working on the right side of a constructive base, now needs a push through 47-47.50