Sunday, January 11, 2009

This Week's Trade 1/12

This week the market needs to prove itself and show which direction it will go. Last week was a pullback week but if we are going to resume the upward grind of the prior few weeks the SPX needs to stay above the 875 support level. If we close below that then you have no choice but to be bearish as that would be a much larger pullback then desired. The bulls will want to get this back above the 915 area which is a spot of heavy resistance.

For Monday I am starting neutral and looking for a decisive move either below 875 or above 900. More likely I will take short entries in the beginning of the week. The daily pivot for Monday on the ES is at 894.25. As of Sunday evening we are trading 881.50. If we get a move back up to the pivot then I wanna be a seller of that if it rolls over. Also there is a short ambush possibly setting up if we get to the 891.25 area and roll over. I will not be considering long setups unless we somehow get over 900.

Tuesday- Treasury Budget

Wednesday- Retail Sales, Business Inventories

Thursday- PPI, Jobless Claims, Philly Fed

Friday- CPI, Capacity Utilization, Industrial Production, Michigan Sentiment

So overall this should be an interesting week to see if the SPX retakes the 915 level to the upside or breaks below the 875 support area and continues lower. Anything can happen so be ready for both scenarios. And of course trade with stops.

No comments: