Wednesday, May 20, 2009
Working For The Weekend
Well first off I just wanted to note that I will be away from the screen until Monday as I am headed out of town for the long weekend. It will be nice to get away from the markets for a few days. Anywho, Wednesday was an interesting day from a chart standpoint. The SPX raced higher to tag the 925 area before reversing course and closing lower on the day. Pretty bearish if you ask me. Why dat?
Well the overall market and even some of the key stocks (like GS as I posted earlier) had ugly outside reversals and failed to break last week's highs. At the same time, momentum indicators are diverging down and rolling over. I would be cautious for the remainder of the week and approach the markets expecting a further pullback. It's tough to say when since we have a holiday weekend coming so the volume will be light and they might wait till next week to sell it down but I am starting to think the SPX could have a date with 850 soon.
For Thursday the pivot on the ES futures is at 907.50 and price is far below that tonight so it could either turn out to be a continuation selloff or a sideways boring kinda day. Whatever it is don't be looking at much upside here.