Rocky Road Ahead?
Buyers have struggled to maintain enthusiasm in the equity index complex this morning as the tech sector continues to trade under heavy pressure. The trade today as far as the SPZ is concerned has been relatively quiet on both the buy and sell side. Sellers wait until the market rallies before entering the fray. And buyers still like to take it up from lower levels only. To throw more confusion on the fire, the DJIA continues to be well bid in a small rotational trade out of tech and into “old economy” issues.
The remainder of the day will be critical for the bulls. For the better part of five sessions now the bears have been saying the recent rally was one in a bear market. Well, the bulls have been trying, but if they fail to keep the trade in the 1400 handle in the SPZ, it will give the momentum players another sell light.
For the rest of the session I am in momentum-trading mode only. I was a buyer early, and thought it would hold, but with the recent pullback under 1398, I think we will trade in a rather tight range in the near-term. If we get above 1405, go with it and buy for a move to 1418. If not, look to stay close to the sidelines.