PPI And Nortel Leading The Friday Blues
The market was hit with a double whammy this morning as Nortel Networks and the PPI report provided an opportunity for the sellers to take hold of the direction. Sellers were aggressive this morning in the SPH as we opened on the low at 1303, just above the limit down price of 1300.10. Since then we have participated in a quiet two-way trade with a session high of 1312.50. The overhang of supply is evident as every step higher, sellers continue to offer the trade. Typically, this is more fundamental in nature. There seems to be both economic and sector specific uncertainty among many firms which is leading to this trade we are involved in.
As for the rest of the session, I think the afternoon will be critical — especially moving forward over the next couple of weeks. If the market can rebound, look for the buyers to reassert themselves on Tuesday. However, if we close below 1310, it should lead to a downmove towards 1275.