Good morning folks. Market is looking like a gapper here with the SPY down about .5% premarkt. The overseas markets were very weak last night spilling over into our open over continuing concerns over greece. GLD AND SLV (GOLD AND SILVER) are both gapping up strongly with silver looking at a 3.5% pop and gold following up 2%. These could be in play today for trades. In terms of the charts the spx is sitting right above (11 points) its first level of support at spx 1120 and then right below that our lows spx 1101. Any strong violation and close below those levels would bring a break of the range of the past 7 weeks and bring us right back to the 2010 lows as our next big support. We do have 2 economic data reports are 10 on construction spending and ism manufacturing index. That should keep the trading a bit muted till those numbers come out. This should be a tricky day. This is the first day of the month on a pivotal quarter. If we are gonna see a 4th quarter run the bulls need to defend these support levels as many stops are placed at the bottom of the range on the s&p which could lead to some heavy stop gunning. It will be tricky today as in the past couple weeks everytime we enter an area of key support there is a battle in that zone with whipsaws and all sorts of chop as the bulls and bears fight for control. I expect nothing different around these levels. This can lead to some frusterating trading as people will enter shorts with no follow through and others will go long with no follow through shaking everyone out of their positions. Its important to be very precise today and trade small as it could be choppy. Otherwise just sit back and sit in cash and wait for the market to confirm its direction. Not everday has to be a trading day. Sometimes its better to sit in cash then lose 100 bucks on commisions and get shaken out of all your positions. Me personally i think the bulls put in a good fight and defend this area. I will be looking to go long on this gap down to support. Of course i wont buy blindly but let the price action on shorterm timeframes guide me. Ranges are very rarely just broken it usually takes an event or something signficant. The bulls have fought this area before and gave us a good rally. The action for sure is bearish but that seems to be when we have some of our best rallies
https://bullsonwallstreet.com/2011/10/1022011-stock-market-review/ make sure to go over my look of the indices and what im thinking for next week. this will be a big help in your preparation.
if we reverse and fill gap these are the potential bounce plays
all the other etfs we play on the bullish side are on support also. they could go both ways. bounce or breakdown.
here are the shorts. lot of them look a bit extended on the daily so we will need to confirm on shorter timeframes for exact entries
all coals, ags, financials are on watch for shorts to the daytrade side. they are too extended to swing short but are extremely weak.
btu, cnx, pcx, pot, agu, mos, tnh all on the list