.wild wild SPX
Thursday, April 23, 2009 at 07:42AM A tale of two markets today as we got the drift of up and down in range until one side gets a “catalyst” to drive the market. We discussed the idea yesterday and it pretty well played out to script. Despite, MS’ below expectations report that drove the futures lower premkt, the market was able to pounce off the 840 mark and continue to squeeze the leftover shorts from Tuesday. This sizeable move takes everything along on the tape with it for a ride. Unfortunately, the morning and afternoon moves to 860 proved to be a formidable level to knockout. The reason in our view is as discussed last Journal this bounce is short covering so far and won’t likely see new buyers step in without a noteworthy catalyst. The shorts have their nervousness and those wanting to go long have their scepticism in catching the SPX 860-870’s and be left holding a white flag. Left alone fear at the top in a correction.
Notice the same market move between 9:55 to 10:30am was the mirror image of the swoon from 3:30 to close. We commented cautiously late this was nothing more than short covering and the financials really took a swan dive in the last 15minutes with volume.
The day may seem like a wash in the end. If you went fishing and traded selective stocks/ sectors it wasn’t a wash of a day at all. We had LVS put in almost a 20% move, AKS trading at $11 b/c of a downgrade popped to 12.40 level quickly. If you have scepticism of the market getting through 860-870’s as we do w/o a catalyst, you have to take profits on intraday trades or you are simply trading against your own beliefs. We also mentions (forum yesterday) CMG ESI APOL CAT and Solar idea (journal) that run some quick points, some right off the bell. Just narrow down your shadowlist to follow individual stocks- sectors and any add-ons we toss out to trade on a daily basis until we get a possible catalyst for the market to hold plays longer in duration.
One good thing we have is a bunch of charts like CMG GYMB GES TIF creeping up on screens for breakout plays recently. Throw up some more in the forum.
So, the premise remains the same as we watch important levels 840/860.
Initial claims # possible mover tomorrow.