Sunday, May 10, 2009

The Weekly Trade 5/11

This week the market looks to build upon yet another week of positive gains. Last week ended strong as the SPX finished at 929 and is now just below the 200 day ema which sits up at 950. That seems like a legitimate target for this week as the rally does not seem to be giving in just yet. That key longer term moving average over head is just too close for us to not test it imo. It will surely provide some wicked resistance once it is reached however.

Tuesday- Trade Balance

Wednesday- Retail Sales, Business Inventories

Thursday- Jobless Claims, PPI

Friday- CPI, Empire Manufacturing, Net Long Term Tic Flows, Michigan Sentiment, Capacity Utilization, Industrial Production

Three sectors have rallied us since March; Banks, tech, and energy. If these sectors continue to work then we should continue higher. We need 2 of 3 of these sectors to push us higher if the rally is to continue. So far so good, but pullbacks are healthy in bull markets so I wouldn't mind to see one soon. Whether it comes this week or not, you need to be expecting it at least because this feels like we are at a baseball game and the seventh inning stretch completed a few innings ago.

For Monday, I want to start with a bullish bias and stay long biased as long as the ES futures stay over the daily pivot which happens to be at 910.50. Below that and we could start to see more selling pressure so intraday bias would turn more negative imo. If we hold that pivot and grind higher I think this market could easily challenge that 200 day ema up at 950 this week. Trade safe.

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