Good morning. Happy Tuesday.
Another day, another big opening gap. You know the normal forces of supply and demand are not in control when the market gaps big every morning.
The market had rallied 4 consecutive days heading into this week, so a little backing and filling – especially considering the unfilled gaps below – makes sense. But sooner or later these gap downs will break the backs of the bulls. How many times can they be expected to step up and support the market as bad news continues to hit the wires?
Earnings season kicks off today with AA, so fears shift from economic numbers to earnings. It doesn’t stop. There’s always something to be worried about which is why strong markets ignore bad news and embrace good news. That’s another way of saying the market will do what it wants to do – the news doesn’t matter. The opposite of course is also true.
Here’s the weekly chart posted over the weekend. The SPX is sitting right at resistance. The question was whether the Nasdaq, which had already broken out, or the SPX would lead. Right now the SPX is in control. Resistance at 850 is holding.
Be on your toes here. This is not a time to take big chances. Research reveals more long set ups than short, but plenty of warning signs are being flashed.
headlines at Yahoo Finance
movers & shakers from MarketWatch
today’s upgrades/downgrades
this week’s earnings & economic releases