Slow, Steady and Soft
Rollover trade continues to dominate the action in a quiet SPU pit. There were strong buyers on the open from a number of dealers, but this was short lived as continued weakness in the tech sector weighed heavily on the momentum traders.
All told, today’s session has been range-bound with stops and starts. However, it is worth noting that we continue to drift lower — a disturbing trend for bulls that has been seen since the release of the Non-Farm Payroll report on Friday. In my opinion, any settlement below 1511 is bearish in the short term for this market. In fact, if this occurs, I would look for a move toward my support zone between 1480 and 1482.50. Keep in mind that next week is Triple Witching, and we typically see the lows by Tuesday afternoon or Wednesday morning. I think we’ll be soft until then.
For the remainder of the session, I am looking for a test of the support zone between 1500-1498 — I would be covering shorts in this zone. If we bounce, I think 1512 will hold any rally attempt, and most likely not be seen today.