Hello, Old Friend — Volatility is Back
It felt like running into a buddy you haven’t seen for awhile this morning in the SPU pit when the market opened.
Buyers were aggressive early, taking us up to 1475.50, where resistance was met in the form of a major institution offering 500 contracts. It was only the beginning as they continued to sell the market down, and I would estimate this firm to have sold over 7000 the last 2 sessions.
Once the NDU started breaking, it was all systems go for the sellers, as price did not matter. The market finally found support underneath 1460, making a session low at 1456.
I think the market is starting to feel around for a bottom, as we have declined about 5% since last week’s 1533 high. I, for one, would not be a fresh seller down here. However, if we settle below 1450, it could lead to a strong round of technical based selling, so keep a strong eye on the prices.
For the remainder of the session, I am looking for a choppy trade that should settle somewhere around the 1460-1463 area. One thing that could turn the market around would be some fresh buying in the Semiconductor stocks — if this happens, we could take out the 1475.50 high and close around 1480.