Feel like the SPX and the dow might close in the red today, CAT is down over $5.00 now dragging the index lower.
'Just thinking out loud and making what hopefully amounts to be an educated guess. You offer great analysis as well. thanks.
I ususally pay attention to Capital Context's model, which works also inside the bloomberg framework. This could be setting up for a big compression trade. I've been following this model for sometime periodically and these spreads usually converge. www.capitalcontext.com Attached is from the site at 1:56pm
thanks for the info. If they have a leading model it would be interesting to track. I can't seem to find it on their site, probably because i'm too tired to see straight, plz clue me in, thanks.
After SPX had 4 up days in a row, the fifth is, so far, in negative territory. It is amazing how quickly the pundits flip the view point. It seemed many were predicting a move to 1327 using everything from measured move analysis to fib ratios. Since SPX held the 1357 level, twice, and has now rallied to, as of last week, over 1400, new highs are now being called for. The dow did managed to retest highs last Friday. The Comp and NDX were not quite as enthusiastic, and with aapl now looking to close at least 50% of the gap, we may be in holding pattern until the employment report and election results later this week. U.S. indexes are entering into the 7th week of this trading range, i think it is unlikely it will last more than 10 weeks. Overall, i would think a new high would print in the next few weeks. But, with some of the negative news and seasonality coming down the pipe, I would be hesitant to be long.
Short Squeeze into fridays NFP number. I'm a little more pessimistic on this Fridays NFP #. Caution on longs.
Market is expecting around 140-150k new jobs, seems they are stepping away from the 2 handle on monthly job numbers. Should be an interesting close for the week when these numbers come out on Friday.
It is fairly common for the cash to close the gap on a Monday morning. But this doesn't seem to alleviate, at least some of, the sleeplessness going into Sunday night over worries of a major market drop. Somewhat surprisingly, the es had closed the gap on its own by the cash open. Today's low could conceivably mark a triple bottom before another leg up. I would have expected 1340 to be retested with this move, but it hasn't yet. The Dow actually looks like it could be developing an inverted head and shoulders, with the neckline near 13,000. Internals are actually looking good so far today, with quite a few major trendlines holding. Clearly, if support at spx 1357, dow 12900, and rut 780 breaks, the move will be swift to the downside. In an election year, however, the bet is on the Bernanke put.
Cash 1340 has been breached but 1335-1340 may be the actual support zone. However, the selling appears orderly. None the less, a move to spx 1300 cannot be outruled as a complex head and shoulders formation looks confirmed. As a whole, most charts are ugly technically, but some, like the comp and aapl, give some indications of support holding.