Selling Before The Holiday
The pattern continues across the equity index complex and that pattern is sell every rally. After a downside gap open this morning in the SPZ, a quick trading rally ensued before the sellers reasserted the strong hand.
We came within 400 points on the SPZ of matching our October 18 low. Since that time, the index is trading in a very volatile, tight range between 1331 and 1336. My key moving forward this morning and into the afternoon will be how we respond (trade around) the 1335-1337 area. If we can get back above the zone and hold into the afternoon — I am looking for a rally to take us towards 1350 on the settle.
The key today in terms of sectors will be the banking and broker dealers along with the semiconductors. If the semis can hold in positive territory, it bodes well for the afternoon. And if the financials can turn their ship around, there should be a rally.