Before the Open (Nov 28)

Posted on by Jason Leavitt

Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed up across the board. India gained 3%; South Korea more than 2%; Australia, Hong Kong, Japan, Singapore and Taiwan more than 1%. Europe is currently posting huge gains. France is up more than 4%; Belgium, Germany and Stockholm more than 3%; Norway, Switzerland and London more than 2%. Futures here in the States point towards a huge gap up for the cash market.
The dollar is down. Oil and copper are up nicely.
The reason for the buying enthusiasm is news from Europe the IMF was planning a $794 billion rescue package for Italy and word the eurozone’s 6 triple A countries were preparing to sell bonds together with the proceeds going towards the financially strapped countries.
For a couple months it’s always been about Europe. Any other news may have induced a short term move, but Europe has held the key. We’ve known for over a month that on any given day the S&P could gap up or down 50 points depending on news flow from Europe. Today’s gap will be better than 30. This is the market we’ve been dealt. Being a technical trader requires a lack of news flow to enable the natural forces of supply and demand to play out. When you throw in pending news that can trump the charts, trading becomes difficult. Hence why I’ve been laying low lately.
What comes next? I don’t have a clue. Encouraging news from Europe will cause traders to forget all the recent selling and negative sentiment and would likely push the indexes higher. Bad news or a lack of confirmation of today’s positive news will have the opposite effect.
I’m going to continue playing it safe. When the market can gap up or down huge on any given random day, I lay low. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Nov 28)”

  1. Jason ,both europe news items above where proven to be naughty big boy rumours and not true
    the big instos work this way when they want to cause a short squeze and a suckers rally
    and the dax and ftse are having just that forcing up usa futures
    we are close to resistance world wide

  2. We appear to have found SPX support at the 1158 (.618 retracement of the Oct rally) that I mentioned last week. Only the super brave bought FRI’s close (which didn’t include me!).
    From the EW perspective, the bullish argument is that the decline is an ABC correction & we now can retest SPX 1292 and higher. There are 2 bearish cases: (1) It’s an ABC of a larger ABC which will eventually target the SPX 1000 +/- area; (2) We’ve completed a lower case wave 3 of a larger wave 3 and we’re going to go below SPX 1000 down to the March ’09 low in a larger 5 wave sequence.
    In the short term, the 1205-1215 area is important, in my opinion. If (as AussieJS suggests) this is a knee jerk, short-covering rally, it should end below 1215 after which the downtrend should resume. I’ll go long if I see an orderly consolidation of this first 1/2 hour explosion in the event we’ve completed an ABC correction and look for a test of 1205 (the 50 day EMA)or at least 1200 (the 10 day EMA). Longer term, I’m expecting a failure and an opportunity to get longer term short for an eventual test of SPX 1000.

  3. if the vix drops under 29 then the instos may be going to accumulation mode not distribution
    for a classic sub 4 wave completion see ftse–that means dji to follow ftse lower–inc spx
    the dax has overextended—its all those ndx 100 apples

  4. Daily SPX chart resistance and intraday gaps that may need to be filled argue for a pullback to the 1177ish-1187ish area intraday today. But, SPX is holding the gain quite well so far with noon time less than an hour away. I don’t want to be long or short right in here.

  6. the retailers are being conned
    the big boys are unloading like hell into stength that they created
    the tick has been at negative extremes for hours and other internals are horific

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