Current Long Positions (stop-losses in parentheses): AFFX (6.92), ENTG (8.95), AGYS (7.60), CALP (7.28)
Current Short Positions (stop-losses in parentheses): None
BIAS: 10% Long
Economic Reports Due Out (Times are EST): Housing Starts (8:30am), Jobless Claims (8:30am), Current Account (8:30am), Bloomberg Consumer Comfort Index (9:45am), Philadelphia Fed Survey (10am), EIA Natural Gas Report (10:30am)
My Observations and What to Expect:
- Futures are flat heading into the open after a few beats on the economic front.
- Asia was down on average 1.6% and Europe trading down over 1%.
- Weakness in the Euro, and the debt crisis in Greece continues to weigh heavily on the market.
- We now have the 200-day moving average in our sights at 1256 (S&P). It’s paramount for the bulls and broader markets to hold that MA and not break below the key moving average.
- Huge bearish engulfing candle pattern over the last two days that wiped out all of Tuesday’s gains.
- Volume for the first time in a couple of weeks showed a noticable uptick in volume.
- In the short-term, the market needs to rebound and reclaim the 1290 level going forward.
- If the bulls can break the 200-day MA, the next price level would come in at 1249, which is the Japanese crisis lows from March. A break there, and we’d likely see a move below 1200 on the S&P.
- Morning Start candle pattern we spoke of yesterday was essentially nullified after the sell-off yesterday.
