Afternoon Tea
The market broke the 1100 level, tested the break and then took on the 200 day moving average at 1108. It would be expected that the shorts would try and make a stand there and they did just that. The market was turned away just under 1108 and is now retesting 1100. The close today should prove to be quite interesting as is watching the battle between the bulls and bears between 1100 and 1108.
Morning Coffee
The market opened higher this morning based on stronger than expected economic data in the eurozone. As discussed previously, the market was very oversold and due for this bounce. At the time of this writing, the market is bumping against 1100 (S&P) which represents a psychological level of resistance and close to the more technical resistance level of its 200 day moving average at 1108. A break higher from here would cause some short covering and provide fuel for a further bounce to the upside.
Morning Coffee
The Yo-You market continues at the open on Monday as the market tries to recover its losses from Friday. This should be one of the best days of the month for May as we have a combination of the first trading day of the month falling on a Monday. Those are both normal days for mutual fund managers to put money to work.
Afternoon Tea
The market continues to consolidate under 1220, taking another peak at it in yesteday's trade. The market is soft today and there appear to be too many unknown geo-political issues hanging out there for traders to feel confident going long into the weekend. The close will be very interesting to see if we get a big down move in the last 30 minutes. On a side note...we have been watching the Libor rate for years which was the first to signal the big move lower and financial crisis of 2008. It has recently been inching up again which bears close monitoring. Look f
Afternoon Tea
The market has rebounded nicely today and appears ready to make a second attempt at breaking above 1220 on the S&P. The high on the futures as of the time of this writing is 1206, still below the previous high of 1216 set on Monday. Caution remains until the market breaks above Monday's high. Another note, the volume is lower today than on the sell-off Tuesday.
Afternoon Tea
The market is just waiting on the Fed today, showing a slight upside bias. There are no major changes to the Fed statements expected and the action after the announcement will be very interesting.
Morning Coffee
Today's market action is important in whether yesterday was simply a profit taking session, or the start of something more bearish. The excuse the pundits are using for yesterday's sell-off was the downgrade of Portugal's debt rating, raising fears that Greece's problems may be spreading throughout the EU. We all know that the market hit major resistance at 1220 and whatever the news of the day was would have been blamed for the sell-off. The market will tell us. Following a big volume sell-off as we experienced yesterday, needs to be reversed on equal volume if the
Morning Coffee
The S&P is still treading water just underneath 1220 in morning trade. Caterpillar (CAT) reported much better than expected earnings as well as raising guideance for the balance of the year, turning the futures from negative to positive prior to the market open. The first couple of trading days this week should tell us a lot about where the market goes over the next few months.
Change of Character?
Following the reversal on Friday, we will be watching closely the market action on Monday. Was Friday an isolated event based on the curious timing of the Goldman Sachs news? Or after reaching the 1220 level that we have been watching for so long, is the market in for a change of direction? There is still talk on the street of a tremendous amount of money on the sidelines waiting for a pullback to move in. That's why Monday's action will tell us a lot. We have a couple of great looking Strangles setting up that we will enter at the right time. It is still
Afternoon Tea
The rally continues into the afternoon following the blow-out earnings reports from Intel (INTC) and JP Morgan (JPM) after the close yesterday. As mentioned in yesterday's blog, the market shook off the lackluster earnings report from Alcoa (AA) and is showing a far more positive stance on Wednesday. Lot's of Fed Speak on Wednesday as Bernanke gave commentary that the economic recovery is modest, won't be enough to create new jobs and likely will stay modest until we (as a country) do something policy wise to actually create jobs. In addition, the Beige Book survey was rel
