Cover ‘Em
Strong dealer buying hit the equity index complex this morning in the first 30 minutes of trading, leading to a solid move off our recent lows. Buy Stops were seen in the SPZ around the 1453 level, as dealers aggressively bid up the market in a fast trade. Since that time, we have moved sideways to higher.
The key moving forward is how this rally is viewed. Is this a low-volume rally that fades back down? Or is it something more, a bottom as we move up towards the 1450 level? So far, as much as I want this market to sustain a rally, I am not convinced that we will have more than two days of upside from here. In the SPZ’s I think we have a chance to get toward the 1385 level before this buying subsides. However, if the selling were to take hold from here, I think we will be in for a crisis of confidence by the general public. If this were to occur, who knows how much further we could trade. Bear in mind, I do not think this is a likely scenario.
I am long and looking for 1385 by Monday afternoon.