Tremors
Reports of an FBI warning involving banks in Washington, D.C., sent S&Ps down to the 1100 level. As the condition in D.C. improves, so does the market. S&Ps have retraced the entire down move on the news. Now we are expecting a rangebound trade between 1100 and 1107 until after the lunch hour.
As we said in the Morning Meeting, below 1108, the market has a bearish tone. Above 1112, the upside improves.
Nasdaq put in a new low at 1340 on the Washington warning, but has since recovered to the 1353-1356 heavily traded zone. For the selling pressure to subside, Nasdaq would have to get back above 1360 in a sustained trade.
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