Thursday, April 23, 2009

Bull Trap?

Thursday the market started out selling down into the 830 area before rebounding midday and reversing clear back into the green to finish near the highs of the day around 850. Another impressive day in my opinion when everyone--myself included--was expecting a further pullback. Well, we got a pullback but it didn't last long. My view going into Friday is that you have to still expect that the market pulls back but its ok to be cautiously bullish if we can stay over that 850 mark and make a charge at 875 overhead once again.

For Friday the pivot is 843.25 and will be the line in the sand for me. If we lose that level early on then they might really finally sell it down hard into the 810ish mark. However, above the pivot, and even more so above 850 on the SPX and I would be quite a bit more bullish into the weekend. So far this "pullback" people are expecting after the huge runup in the last 6 weeks has been more like a consolidation. And that's positive imo. We could just mark time between the 825-875 area for a bit and allow some indicators to get oversold before the next leg higher. Whichever it is, remember to trade with a plan, and trade safe.

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