Light and Tight Are Right

In this market environment, keeping positions light while also keeping a general tight leash on all trades has served us well in terms of not over-extending ourselves into a myriad of overnight gaps, either way, in recent weeks. 

As we discussed for Members this morning, it is apropos that on Groundhog Day stocks are faced with the same task of trying to salvage a sell-off in the face of weak oil, again. 

While a few standouts like FB GOOGL KORS are defying the selling early on, too much weakness in energy, financials, and especially biotech have been weighing the market down. 

On the hourly chart of the SPY, below, bulls have a wee-defined battleground area to defend now, or else I suspect we make fresh lows in short order. Note the massive triangle going back several weeks now.

Before I start to lean into some shorts, I would want to see bulls fail to adequately defend $190.