Market action for 1/7/09

Quick post

We had our EoQ rally to save the day, but the rally ran out of steam at the 920 rejection point. Tomorrow's open could be a gap up or gap down depending on how european markets go as well as the knee jerk reaction to the ADP news in the morning. Based on the setup we should get a slight gap down of a few points to start the ball rolling. However, given the bullish close in the futures on volume and the fact that it is holiday weekend, we may have further rally attempt that should fail under SPX 925. Any breach of SPX 930, means we are off to the races to much higher levels. Downside confirmation is when SPX 912 is broken with volume. Any low volume break lends itself to a spring setup that should take us back to the 920 area once again. Expect choppy action on low volume until everything resolves by next Monday.

Market action for Tue 6/30

Monday's ramp job changes the bearish scenario for July. Unless the market closes below SPX 900, downside is likely to be limited going forward. Assuming SPX closes above 911 for tomorrow, what looks possible though is another attempt at the 950s with a possible peak of 968 to 976 for July. The invisible futures buyer is still holding up the market and they sure know what to do. If we close higher tomorrow, we are very likely to have further upside for the rest of the holiday week. Depending on market action tomorrow, shorting the close might be a good strategy for a down day on Jul 1.

First post

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