Monday, January 12, 2009

Monday Meltdown

After we gapped down Monday we didn't fill the gap at all. There were a few very nice ambush short trades on retracements. It was just a down day from the get go and losing 875 to the downside got me tilted much more towards the bearish side for the time being. We needed to hold that key level or any hope of a move back over the 915 spot. Even with the last hour bounce we closed at 870.

For Tuesday I want to start out neutral and look at the action around the pivot to determine where the days trend may go. The pivot for Tuesday is at 871.50. There is a lot of resistance between the 875-880 area so until we get over that there is no way I will be taking longs. I believe there is a short ambush trade setup at the 873 level. That short ambush has a possible target of 854.50 (which is coincidently right near the lows from the last week of December). If we fail to break above the pivot in the morning then we could see another day of selling that might take us to the mid 850s.

Also it looks like the commodities (anything from oil and gold to wheat and soybeans) got totally clobbered on Monday. Seems like oil specifically is leading the market lately. I think oil at least tests the 34 area this week so if that's the case, then the SPX could go lower as well. Trade safe.

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