For Tuesday, like I said I want to be expecting a continued pullback and look for the low 820s at least. The pivot sits at 838 so any kind of failure to break above the pivot indicates weakness that should be shorted. We are sort of in no man's land right now. I think we could see a multi-day pullback but I also want to be aware that the trend is up and if you wait for too much of a pullback then the train might leave the station.
Monday, April 20, 2009
Back To The...820s?
Monday opened with a sizable gap down from Sunday evening when the futures were selling off. The pullback (yes that's all it is for now) was a bit more sharp than I anticipated but even so it felt more orderly than past selloffs. Nonetheless it was what it was and it brought us back to the 830 level on the SPX. We have a gap below here at about 823 on the ES futures and I look for that gap to be filled on Tuesday before we get any kind of potential for a bounce. There is strong support all around that 820-825 area with the 20 day ema sitting there and the downtrend line going back months which we broke out of recently and are now coming back down to retest as support. When it comes to breaking out of a trendline th erule is to always wait for the retest and look for a bounce. Let's see if we get it.