SOLD, SOLD…SOLD!!
The equity index futures complex felt like it did in the spring, with urgent selling, aggressive trading and lots of shoving and yelling.
The key asset good traders possess on days like this is the ability to maintain focus when others are losing theirs. There was a desperate quality to the trade near the lows – as one of my friends once told me – “I wait until I see the white’s of their eyes before I fire.” Appropriate for today’s action.
Now, to the market…Merrill Lynch started things off by selling early and often, once the Nasdaq hit the skids, Locals became aggressive on the sell side and prices moved quickly lower. For the rest of the session, I am looking for a choppy trade until the final hour where the volatility should explode. 1446-1450 is the key, I think the best play is to sell against this level with buy stops placed above the 1455 number. If we do not get this high, I’ll look to hit bids on the way down. In other words ride the momentum for a retest of the 1430 low.
As for the NDU, it is worth noting that the upside gap open left from the June 1 employment report has been filled with our 3522 low. Are we sold out? I think we’re getting there. The SOX index is the key, and it is higher, if this continues, it could lead to a possible rally late in the session.