Before the Open (Sep 30)

Posted on by Jason Leavitt

Good morning. Happy Friday.
The Asian/Pacific markets closed mixed. Hong Kong lost 2.3% and India 1.5% while New Zealand gained 1.3%. Europe is currently down across the board. Other than Norway, every market is down at least 1%. Futures here in the States point towards a relatively big gap down open for the cash market which will mostly wipe out yesterday’s late-day rally.
On Monday I stated the following: It seems like many are looking for prices to hold and then the selling to resume next week. When many look for the same thing, that same thing doesn’t often play out. I would not be surprised to see a gentle move up for a couple days and then the selling to begin again Thursday or Friday…a little experience tells me some bigger traders will jump the gun and sell a little early rather than wait for next week.
This scenario played out pretty darn well. The market was strong early in the week and weak the last couple days. Big funds that need to unload positions do it when they can, not when they’re forced to. That means taking advantage of the opportunity to sell when everyone agrees the market will stay propped up until the end of the week.
The indexes are still range bound but a new development has gotten my attention this week: the under-performance of many leadership stocks. AAPL, AMZN, BIDU, PCLN, WYNN just to name a few. On a long term basis, these stocks remain in steady uptrends, but short term they’ve started to lag. Twice this week AMZN has gapped up and gotten hit hard with selling pressure. Yesterday it lost more than 3% while the indexes move up. Can the market rally if many of the leadership stocks lag so much? Probably not…unless a new batch of leadership stocks step up, but math doesn’t work out right now unless the Nas changes the weighting of these stocks in their two indexes. You get the point. The leaders need to lead because other stocks will blindly follow along but also because the leaders are over-weighted in the indexes. If the over-weighted stocks drop, it’s almost mathematically impossible for the indexes to move up.
The trend remains down. Don’t make this more complicated than it is.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Sep 30)”

  1. Well the tooth fairy did not put anything underneath my pillow last night.
    In fact, the Wicked Wolf knocked on my door and took away all my profits
    in Silver and whatever else I was holding this week. HW

  3. well Jason,thats what i like to hear—what are the big boy instos doing/thinking
    they are the ones that move the markets–not so much the technicals
    with ur opts conections ect u must get some insights–so thank u for shareing them

  4. my tick ind ect and piviots give me some ind as to instos activity,but unles some jump the gun then i think when a daily range is found and being monthly opts ex in some parts,then we may have somewhat sideways,with next tues/wed more productive to real trend
    so i will wait ans see at open what direction the instos take—-IF they show their hand

  6. dont short a quite market so ive been flat all day waiting for some bull to appear to short
    but i think the bulls maybe grasping at straws to eat
    with earning season –i cant see alcola making money and their are many rumours re banks inc germanys deuthcer bank–french /spanish banks and morgans ect
    wont go into to many boring fundamentals but point is money may be coming out of market–sellers—not buyers
    chart wise –do we get a impulsive down–hope so ndx and dax look primed to go
    —-oct 1929 —oct 1987—oct 2011
    fast and painfull

  7. While I’ve been away from my desk all day with appointments, I see the SPX is assualting 1140 again. My area of interest to resestablish short position was 1160-1175 but that ain’t happening so far.
    Yesterday, I mentioned my EW interpretation of an “abcxabc” dowonside pattern from 1196 with 2 price objectives, i.e. 1145 & 1130. We appear to be in a posiion to test 1130 at today’s close or MON’s opening. If we blow through (in AussieJS’ scenario), I’ll regret not taking the longer term perspective and maintaining my short positions but hindsight is always 20-20 as they say.

  8. My last late day comment – look at a 15 or 30 min SPX chart and draw a downside trendline from 1196. The bulls need to get something going starting with a move at least above 1146 for starters.

Leave a Reply