Big Picture Analysis: Yesterday, we said the bulls needed to assert, and instead, the bears flexed their might, driving the markets lower on disappointing news, and again overnight. While one might say the markets are oversold and due for a bounce, with major support penetrated twice, we must be on alert for the markets becoming materially oversold-er. Also, note the MIDAS curve launched from the April 18 low has now failed to contain price, often marking the end of an uptrend.
Tomorrow’s Employment Situation is seasonally bullish (except when it is extremely below consensus), so a bounce could very well develop and capitalize on the lack of news early next week (Retail Sales and PPI on Thursday, then CPI on Friday). It is our opinion, however, that any bounce will be viewed as a shorting opportunity. Summers are often defined by choppy sideways action, so we will need to consider what the trading range may be over the coming weeks.
Trading Today 5 may 2011 : The upper end of the projected range includes day-session-only S1 and yesterday’s low, from 1336.00 to 1337.50. Note that with price set to gap below S1 at 1336.75, we will be on alert for a trend day down, thus making longs even at the lower end of the projected range risky. If 1337.50 is exceeded, we could see a gap fill, and would consider shorts near this 1342.75 to 1344.00 area, but likely not above. The lower end of the projected range includes a major 50% retracement, last week’s low and volume support, from 1327.25 to 1328.75. We will likely not attempt a long below this area. No major news, though Bernanke releases a speech on the open.
Day Trading Guide
Daily Gaps
1343.75 (4:00 pm close)
1343.00 (4:15 pm settlement)
Daily Pivots
1344.50 (day-session-only)
1345.25 (day & overnight sessions)
Upside Price Action Targets
1347.00, 1352.75, 1356.25, 1362.00,
1366.75
Downside Price Action Targets
1271.75,1280.25, 1290.75, 1294.00,
1300.25, 1324.25, 1327.75
Today’s Scheduled News
Major Market Movers
None
Minor Market Movers
Bernanke speaks at 9:30 am
Tomorrow’s Scheduled News
Major Market Movers
Employment Situation at 8:30 am
Minor Market Movers
Consumer Credit at 3:00 pm
source wallstcheatsheet.com... For the latest updates PRESS CTR + D or visit Stock Market news Today
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