Tuesday, February 3, 2009

The Dish

So Tuesday was a pretty quiet day till the last two hours when we ripped higher on what seemed to be a decent short squeeze on low volume that sent us to 840 or so. While this market will be seeing some ugly data the rest of the week it will be interesting to see exactly what is priced in. We definitely have a chance at rallying further but I'm not convinced of a huge break higher unless we eclipse the 850 resistance level soon.

The setup for Wednesday is simple. The pivot on the ES futures is 830.50. That is also a nice sized ambush long from the late day rally Tuesday. Buy the pivot and expect it to hold if we are going higher. The target on that trade is 844.

Overhead I mentioned 850 as a key resistance level we need to breakout of if this rally has legs. That is the 61.8% retracement of the selloff we have had since last week. There is a larger ambush short at 842.25 so if we fail near that level and rollover then the selling could get real nasty. Just watch the pivot to tell you the bias for the day.

No comments: