Who Turned Out The Lights?

The equity index complex is doing their best impersonation of Northern California as we are extremely quiet. The market is having a volatility contraction, and the way for a daytrader to make money is by waiting patiently on the sidelines before executing a trade that will normally last longer than it has in the past few months to reach the objective.

As for the session, the SPH has just traded above yesterday’s afternoon high at 1360. Now comes stiff resistance between 1361-1365, along with 1350 in the cash market. If we do trade above this resistance zone, it should be off to the races. In fact, the ability for this market to shrug off the bad news shows just how much we are depending on Greenspan and Co. for a 50-basis-point cut on January 31. If this does not happen, I think we could have a very negative reaction in the market.

As for the rest of the session, it’s a tossup for me. No volatility equals no fun for a daytrader.