Before the Open (May 3)

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly down; South Korea lost more than 1%; India lost more than 2%. Europe is down across the board. Futures here in the States point towards a moderate gap down open for the cash market that will put the S&P a couple points below yesterday’s low.

Let me repeat a couple things I stated yesterday. There are many ugly candles out there. After essentially two weeks of straight up movement followed by a gap up, yesterday was the most bearish day we’ve had since early April. How you play this is entirely dependent on what time frame you trade. If you’re a short term trader who only typically holds for a couple days, yesterday was a reason to exit all longs and and buy reverse ETFs. If you’re a longer term trader who tries to nail the bigger trends, yesterday’s gap up was a reason to exit stock that hit their targets or got pretty close to their targets, but since the overall picture is still positive, you can hold the charts that remain in tact. The market doesn’t go straight up forever. There will be pullbacks and corrections along the way, and if you wish to nail some bigger moves, you have to be willing to give a little back every once in a while. Be flexibe. Trade the charts as they unfold. Do not trade what you think should happen or want to happen.
The index charts remain in great shape. The indicators support a continuation of the uptrend. BUT, there will be pullbacks along the way. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Economic Numbers