We have a short week this week with the Martin Luther King Jr. day on Monday. I’m going to trade cautiously at the beginning of the week because I think the market overall is approaching pullback territory. The SPX is right near 2650 which was support at the end of 2018 and is where it stalled before the large December drop. With that said, the market doesn’t feel overextended. The RSI of the S&P 500 is 61.98 on the daily chart, so it isn’t oversold yet. The VIX, the volatility index, shows a similar story. (but in the reverse direction since volatility normally moves in the opposite direction of the market)

Futures are red as I type. I think a small pullback is healthy so I’ll see where the market lands. If it looks like the market is going to be strong this week, we are all-systems-go to place a trade. If not, I’ll be patient while volume comes back in from the long weekend.

This week, I’m looking at Brighthouse Financial Inc (BHF). I expect this to track the market fairly closely so we’ll see where it pulls back to. I think high $35s or low $36s would be a good price for this but I’m not setting a buy order yet because I want to see where it moves to as the market opens.