Quiet Selling Continues
A quiet, holiday-style trade with a bias towards the sellside is the report from the SPZ pit this morning. As I noted on Friday, I felt we would have follow selling Monday morning. Now that we exceeded Friday’s session low, and the NDZ continues under tremendous pressure with little liquidity, the question is where to from here?
I am expecting the SPZ to retrace its morning down move over the next couple of hours and trade back towards the 1420 area. After this occurs, I think the sellers will reassert themselves and try to push the market towards 1400. However, if we trade to new session highs — above 1427 — during this bounce-back period, then my downside afternoon prediction is tabled. If this scenario were to occur, I would look for a trade back toward the 1440 level in the afternoon.
One note of caution for traders — the pit is very illiquid. The largest order I saw in the pit from a dealer this morning was for a 50 lot. This means one should expect choppy waters all session and keep it close to the vest.
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