Obama Drops The Bomb

Well Thursday began pretty bullishly as we rallied into the 780 mark on the SPX. Even as we came back down to test the pivot midday I thought we would rally from there but then Obama revealed his budget plan and the market showed him what it thought. And folks the markets are never wrong. We sold off into the 750 level by the close and seem to be setting up for more downside Friday.

We broke an uptrend line of a larger triangle that has been forming on the 15min chart since last week. With this breakdown I think the market could retest the breakdown zone in the low to mid 760s and then sell off further into the weekend. As for now we are still in this range between 741 and 780 that should determine the trend going forward, once broken to either direction. My bias now is lower but we shall see what happens.

As for Friday the pivot on the ES futures is at 760.25. We are in the low 750s after hours right now and if we even make it up to that pivot in the morning then you can bet on some fading to the downside to come in. Sellers will more than likely make a stand at the pivot and even if we get over the pivot a short ambush sets up at 764.75. Bottom line is don't hope for a rally because resistance above here is tough and I doubt the market busts thru it going into the last trading day of the month and week.