Stocks were set up for a directional move today, and the financial news put a lot of traders in a bearish mood.Between Geithner’s comments and concerns about the automakers, there’s plenty of ammo for the bears today. Technically, the stock index futures saw range contraction and inside days on Friday, so we had a tipoff that a move was coming today.Below is the daily Trade or Fade report that I sen out last night for the June NASDAQ.The Naz had a “trade” day set up today. Friday was an inside day, and the range was 57% of Thursday’s. range.This range contraction said the odds were good for a diretional move today-a strong intraday move away from the session open.The support and resistance levels highlight areas that Trade or Fade would use to trade such a move.
Below is a 10 minute chart for the June NASDAQ futures for today.When I got to the office this morning, I first looked at the S&P futures.They also has a “Trade” setup, but they never got back over their first support point.(On a “trade” day, I look to sell a break below fist support at S-1). The Naz had broken under its first support at 1230 earlier, but regained it, and trade over it for about two hours. This set up a short sale opportunity around the morning stock makret open as it fell back through 1230.From this short sale the market tumbled, and hit the first profit target at 1210 by about 9:30 AM.For the past hour, it has traded around S-2, , maybe waiting to see if anything comes of Obama’s press conference about the automakers.
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