Options Week Kicks Off

The bounce on Friday appears to have been just short covering as profits made last week were locked in before the weekend. There are still a few issues trading independently of the indices, but the broader market does not appear to have solid support yet. Considering the fact that this is options expiration week, expect games to be played. We will be looking for the QQQQ to make another stab lower and suspect that this week will see base forming around the $40 area. During this period dips should be used to accumulate, but we do not recommend buying breakouts. Though we will likely continue to experience some selling pressure this week, it is far too late to short this oversold market.