Decision Time, Part II
Yesterday’s late day selloff did little to
strengthen the bull case, but did not entirely blow it out of the
water. As we all know by now, the market has been doing a fair share of backing
and filling lately, and yesterday’s action may have been just that.
As of 5:30 AM PST, the S&Ps are resting right on a key level,
879-80. Yesterday’s high was an exact .38 retracement off the 11/6 high and
11/11 low. With that in mind, 886 will be pivotal on the opening, a failure to
close the opening 30 minutes above that level will be a negative. The first
downside target is 866.
The Nasdaq itself is also offering up some decent levels from which to take
your cues. Yesterday’s high was a .50 retracement of the 11/6 high and 11/11
low. At present they are hovering around 998-99, another key level. Again, a
close above 1012 would be positive within the first 30 minutes of trading.
Today’ commentary is a bit more technical in nature than the usual morning
column. It is a reflection of the current market. While markets always trade
technically, it is clearly evident in recent sessions that the most robust moves
have come off of technical levels. It is also requiring you to anticipate your
trades a bit more than usual. Rather than waiting for the market to wave its
arms alerting you to the trade, it is forcing you make a stand at levels.
As mentioned in my column the other day, the market is clearly trading in a
manner that illustrates that most traders are “feeling” their way through this
current trading range. What else could explain the seemingly endless offers and
bids at each 1/2 point up in the futures. Like a coiled spring, however,
volatility will strike when you least expect it, and it will be fierce. In the
meantime, navigate with caution.
Keep an eye on Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) as news is
swirling around that the CEO, Sandy Lyle, “forced” that rocket scientist of an
analyst Jack Grubman to upgrade AT&T
(
T |
Quote |
Chart |
News |
PowerRating). Frankly, I could care less about the merit of the story, what matters is
that it casts doubt and fear, a trader’s best friend.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 902 | 1038 |
| 897 | 1027 |
| 889-91 | 1014 |
| 879-81 | 1007 |
| 872 | 1002 |
| 865-66 | 990.25 |
| 861 | 984.50 |
| 854-56 | 979 |
* indicates a level that is more significant
As always, feel free to send me your comments and
questions. See you in TradersWire.