9:00am (EST)

The market closed right at support like we figured heading into today’s big event.  We are pretty sure Ben Bernanke checked yesterday’s closes on the indexes so he is well aware what his carefully chosen words could mean for the market.

The Dow dropped 107 points, or 0.8%, to end at right at 13,000.  The blue-chips traded in the red all session long and dipped to a low of 12,978.  Today’s action could produce a 200-point swing on the Dow which would be the next wave of support for the bears (12,800) or a rebound back to resistance for the bulls (13,200).

The S&P 500 fell 11 points, or 0.8%, to settle at 1,399.48.  The index traded to a low of 1,397 and could face a quick test to 1,375 on continued weakness after failing to hold the 1,400 level.  The bulls could easily reclaim 1,410 or even 1,425 on bullish Bernanke comments.

The Nasdaq declined 32 points, or 1%, to finish at 3,048.  Tech was unable to hold the 3,050 level and could test 3,025-3,000 on a continued pullback.  A run back to 3,100 could be in the mix if the bulls get some good news.

The Russell 2000 closed at 808, down 9 points, or 1.1%, while the S&P Volatility Index ($VIX, 17.73, up 0.67) finished above 17.50.

Futures are showing a bullish open and look like this:  Dow (+113); S&P 500 (+12); Nasdaq 100 (+27).  Bernanke is no E.F. Hutton but everyone will be listening starting at 10am. 

We have added several new possible trade candidates to our Watch List which could be opened once we get a good feel on what might happen.  Subscribers, check the Members Area for the details and be on the lookout for New Trades or possible Trade Alerts if we need to take any action before our midday updateWe have added several new possible trade candidates to our Watch List which could be opened once we get a good feel on what might happen.  Subscribers, check the Members Area for the details and be on the lookout for New Trades or possible Trade Alerts if we need to take any action before our midday update.