Monday, December 22, 2008

Manic Monday

Today there were a lot of analyst downgrades that sent the market lower all day. We had a hard time getting over the daily pivot up at 888 today and from the early going the market showed weakness. As soon as we broke the 876 support level I started to look for short setups. The best trade of the day came when the 15min chart formed a nice bear flag in the low 870s right before 2pm et time. From there we dropped a quick 15 ES points on the futures and the trade worked well to the downside. The market reversed course in the last half hour as it has been doing alot lately. We closed well off the lows but still a bit below that key 876 area on the futures.

876-880 is a huge level of resistance now that I will be watching the remainder of the week. I think Tuesday gives us some more possible downside if we cannot break higher above this level. To the downside it is probable we can see 850 and below that watch for 838-840 for support.

During this week anything can happen with such low volume but the bias appears to be set for a bit more of a pullback if we cannot get over the 880s and close there.

Odds are that this week will be a slow grind out sort of market week, with plenty of choppiness. So take gains when you get them as I can already tell this market is a bit more erratic than usual.

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