Watch The Numbers…Excellent Short-Term Trades Possible

Yesterday’s grind lower is beginning to highlight
just how weak the market is currently.
 Naturally there will some
bounces along the way, but it appears as though we are experiencing the complete
opposite of what happened during the late ’90s, albeit on less of a scale. Each
rally is sold, time and time again. With the market acting so orderly, it
requires you to not be as sensitive to every little jiggle. Rather, set your
stop and stand your ground. Each short I initiated yesterday (based on the
5-minute chart) rarely went against me more than a few cents before succumbing
to gravity, despite all the “noise” during the duration of the trade. As odd as
it may sound, as the S&P trader I just heard commenting on Bloomberg said about
selling the rallies, you need to give some thought to a reversal. The market
just has a nasty habit of catching you flat-footed.

The economic numbers due out at 9:45 (Michigan Sentiment, 83.5) and 10:00 AM
EST (Chicago PMI, 53) will offer some excellent short-term trades IF and only IF
the numbers come in far away from consensus, higher or lower. Numbers that come
in in-line or fractionally higher or lower simply create noise and do little to
alter the current trend

Key Technical
Numbers (futures):


*875* 1011
862 996
857 *979-84*
846-48 957
830-34 *941*
*826* *932-33*
817 925

I could not resist putting in the quote from Bill Fleckenstein. I know that
opinions regarding the market/economy are far too common, but if stated in a
satirical manner, not only does it educate, but also puts a grin on your face.

“…Greenspan averred that after geopolitical risks are
resolved, economic growth will pick up again because of ‘low interest rates
and the continued rise in worker productivity.’
Of course, once the
‘geopolitical risks’ are resolved and we still don’t get a pulse, they can
always point to some other fly in the ointment. Right now, ‘the growth is in
the mail’
and ‘the dog ate my stimulus plan’ are up there on the list
of potential alibis. Suffice to say then that the heads of the FOMC members
remain ‘up and locked,’ which is a Jersey expression implying that due to the
unusual location of their cranium, their visibility is extremely limited.”
I have read that sentence about three times, and every time I do, I laugh
my head off.

Have a great weekend. As always, feel free to send me
your comments and questions.