If The Nasdaq Hits This Level, Watch Out For The Market Makers
I realize its late summer and many
market players are at the beach relaxing but I have a few observations to share
this week. The major indices are approaching or have already begun to
test some trend lines going back to late April of this year.
First take a look at the S&P 500
If we don’t hold around current levels the next stop could very well be the
1191 to 1200 area.
The NDX has a little room but same idea.
The Dow is pretty much the same story.
Next up, the SOX
Keep a closer eye on this one, the SOX has been a market leader.
And finally the Nasdaq Comp
This one is right there much like the S&P. If this level breaks we could be
looking at 2055-2077 area.
This one is right there much like the S&P. If
this level breaks we could be looking at 2055-2077 area.
I’m sure everyone sees the same levels I have pointed out here and will be
looking for clues as to which way it will play out. A game often played by
market makers when a stock or index is approaching important levels such as
these is to test the market. Hitting bids and advertising yourself as a buyer to
see if sellers come into the market gives traders some nice information. If
buyers appear it is a good indication the level will hold. Watch the areas
around these levels and see if you can gain an advantage by the action around
them.
Trendlines are only lines and there are many other factors that come into play
at various levels but keep an eye on these levels as they are put to the test in
the dog days of August as we approach a typically weak month in September.
Kenneth Levey is head of Trading For Connors Capital LLC. Mr. Levey has more
than 21 years of professional trading experience having previously been Vice
President of Trading and a Market Maker for Spear, Leeds & Kellogg / Goldman
Sachs in New York.
Ken is a 1984 graduate of the University of Miami where he received his degree
in Business Administration majoring in Finance.
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