{"id":526,"date":"2009-04-15T06:30:07","date_gmt":"2009-04-15T11:30:07","guid":{"rendered":"http:\/\/leavittbrothers.com\/blog\/?p=526"},"modified":"2009-04-15T06:30:07","modified_gmt":"2009-04-15T11:30:07","slug":"before-the-open-74","status":"publish","type":"post","link":"http:\/\/blog.leavittbrothers.com\/?p=526","title":{"rendered":"Before the Open"},"content":{"rendered":"

Good morning. Happy Wednesday.
\nYesterday the market gapped down pushed lower\u2026rallied to fill the gap\u2026and then was weak all day. Premarket futures trading suggests an open at or below yesterday\u2019s low. Is there reason to be concerned?
\nThis is what\u2019s on my mind:
\nThe market has put in 5 consecutive up weeks (it\u2019s due for a break).
\nVolume has declined week after week.
\nThe intraweek range has generally narrowed.
\nMany unfilled gaps sit below the current level.
\nThe internals market breadth indicators are in overbought territory and at levels that have produced tops during this bear market.
\nAnd of course we are still in a bear market (one of the worst in history), so until proven otherwise, rallies are nothing more than rallies within a downtrend.
\nAnd now we can add a new item. GS beat earnings and announced a secondary offering. The stock dropped more than 11%. INTC announced earnings yesterday after the close. They beat expectations, but the stock is down more than 4% before the open. We are just now getting into earnings season, and if stocks are getting hit after beating, what happens when expectations are only met or companies miss?
\nOh and of course the SPX was very near resistance (between 850-875).
\nGive all this, it\u2019s hard to justify being aggressive on the long side. Or being long at all. Maybe the market pulls back a couple days and then launches onward and upward again. Or maybe a top is in place, and we\u2019re headed back to the lows. We don\u2019t know (nobody does), so our job is to play the percentages, and the percentages right now don\u2019t support long trades (I\u2019m assuming you\u2019re a small enough trader that you can exit the market and re-enter fairly easily).
\nHere\u2019s the weekly SPX chart. It shows the 5 consecutive up weeks on declining volume and the presence of resistance just overhead.
\n
\nHere\u2019s the daily SPX chart. The index remains in an uptrend, but with resistance just overhead and a rising wedge (bearish) forming, I\u2019d rather take profits on longs and force the market to prove itself than be forced to exit after profits have been given back.
\n
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Good morning. Happy Wednesday. Yesterday the market gapped down pushed lower\u2026rallied to fill the gap\u2026and then was weak all day. Premarket futures trading suggests an open at or below yesterday\u2019s low. Is there reason to be concerned? This is what\u2019s on my mind: The market has put in 5 consecutive up weeks (it\u2019s due for […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/526"}],"collection":[{"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=526"}],"version-history":[{"count":0,"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/526\/revisions"}],"wp:attachment":[{"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=526"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=526"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=526"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}