I should just note that when the market either goes up or down on silly shit like this, it rarely ever sustains its momentum for very long. This is really ridiculous crap to trade on. I ain't no moralist, but people should be ashamed of themselves.
BAC getting more cash too now- do we even find legs later on tomorrow? could we breach 815 before rebound?
This is why I try to to not pay attention to the news. I make a guess as to what will happen in a given time frame and im either right or wrong. The market just is what it is.
Another Opinion: Swing Trader: Bears Back in Control Before Expiration, Earnings, and Inaugaration Tuesday's moment of strength formed a "doji" pattern on the charts of the major indices, which suggested a "rest/consolidation" of the current trend (Monday was a "trend day down"). These "dojis" are often resolved with either a "continuation" or "reversal" of the trend. The opening gap down on Wednesday morning basically "trapped" those who initiated Longs on Tuesday and led to an aggressive first hour sell-off as traders liquidated their losses. That selling pressure bought the SPX down to its 50% retracement around the 842 level and its lower daily Bollinger Band. It also brought into play the October reaction lows around 836/845 which I've mentioned previously to watch as a support area. Market internals were very weak on Wed, with a high TRIN reading reaching above 4.0 in early trade that stayed above 2.00 all day... Note that most "spikes" in TRIN are often followed by "bounce days" within the next 2 days. Combine that knowledge with a series of retracement support zones coming into play among "oversold" conditions (RSI-5 on the SPX trading in the 20's) and it looks like the odds favor a rally into the 3-day weekend before Tuesday's inauguration. One major concern of course is the decisive break of that December uptrend line. The "bullish dynamics" above that line into year-end favored the long-side, but clearly that momentum has shifted back to the downside as we've already seen 2 support levels fail here in January making for 4 Distribution days out of the last 6. First was the Jan 8-9 pullback to the 20-ema/50-sma that didn't hold, next was yesterday's/today's correction to the 38% retracement failing to hold. I noted this action on the chart below. If there is further weakness into Friday's Expiration, then the next major support on the SPX lies near the early December lows around 815-area. This also coincides with the Fibonacci 62% retracement of 818 and some Gann levels around 820-vicinity, especially if challenged around Jan 16-20, approx. 8 Fib-days off the current Jan peak. Price action would also likely be below the lower Bollinger Band at that point, so I think it would very difficult not to be a buyer for a bounce in that case. Bottom line, the momentum has clearly shifted back into the hands of the bears, which means Longs are considered counter-trend demanding strict risk parameters, so pick your entries wisely. Otherwise, if you're a bear, the "Short first, ask questions later" approach seems to be working fine for now.
haj, i agree and it is exp week but look at the #s coming out on thur and fri and its gonna be hard to mount a rally intot he #s if they are bad www.forexfactory.com
Interesting what what the number 1 most active was. http://biz.yahoo.com/opt/stat1.html http://finance.yahoo.com/q/op?s=SPY