Bears Push Near-Term Support

9:00am (EST)

The bears erased the bulls’ gains for the week following Wednesday’s 1% drop across the board. The major indexes held near-term support after disappointing economic news and wishy-washy statements from the Fed.

The Dow dropped 139 points, or 0.9%, to close at 14,700. The blue-chips traded to a low of 14,687 and finished below the 14,800 level. This gets 14,600 back in play on further weakness and a close below this level would be bearish for a test down to 14,400. A close back above 14,800 keeps the current trend intact.

The S&P 500 slipped 15 points, or 0.9%, to settle at 1,582. The index held 1,575 after trading down to 1,581 but a break below this level would be troublesome. A rebound today above 1,590 will get the momentum back on the bulls’ side.

The Nasdaq gave back nearly 30 points, or 0.9%, to finish at 3,299. Tech traded down to 3,296 but was unable to hold the 3,300 level into the close. There is further risk down to 3,275-3,250 again if the bulls can’t clear 3,300 and push 3,325 today.

The Russell 2000 got punished for 23 points, or 2.5%, to end at 924. The small-caps went out at their lows for the session after falling below 940 and then 930. Not good. A dip below 920 could get nasty as there is risk down to 900 on a continued pullback.

Meanwhile, the S&P Volatility Index ($VIX, 14.49, up 0.97) jumped 7% and traded up 14.67. The VIX held 15 but we have warned about a close back above this level and anything above 17.50 could spark some panic selling.

Futures are favoring the bulls this morning and a higher open as we go to press: Dow (+90), S&P 500 (+10); Nasdaq (+22).

Subscribers, check the Members Area for the updates.

Comments are closed.

CFTC Disclosure:

GOVERNMENT REGULATIONS REQUIRE DISCLOSURE OF THE FACT THAT WHILE THESE METHODS MAY HAVE WORKED IN THE PAST, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. WHILE THERE IS A POTENTIAL FOR PROFITS THERE IS ALSO A RISK OF LOSS. A LOSS INCURRED IN CONNECTION WITH Momentum Options Trading, LLC CAN BE SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CIRCUMSTANCE. THERE IS SUBSTANTIAL RISK IN TRADING. A LOSS INCURRED IN CONNECTION WITH FUTURES TRADING CAN BE SIGNIFICANT. WE MAKE NO CLAIM REGARDING PAST OR FUTURE PERFORMANCE. WE MERELY TRACK EVERY TRADE AND SHOW THE PERFORMANCE OF ALL TRADES THE SYSTEM OR NEWSLETTER PRODUCES. SIMULATED TRADING IS DIFFERENT THAN TRADING REAL MONEY. HYPOTHETICAL RESULTS ARE NOT REAL RESULTS. PLEASE CONTACT YOUR BROKER ABOUT THE RISK OR TRADING STOCKS, OPTIONS OR FUTURES. ALL COMMUNICATIONS ARE OPINIONS NOT ADVICE.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Blog

Bears Push Near-Term Support

CFTC Disclosure: