1:15pm (EST)
We said March Madness would come early and that volatility would pick up in the market. Today’s weakness is all about the Greek debt situation, which is back in the front burner. There is a Thursday night deadline for Greece and its bondholders to come to an agreement over the debt bond swap in which the creditors would lose nearly 75% of their value on the bonds. It’s been nice not having to write about this situation for a few weeks but Greece is the word today.
We have spent a lot of time talking about the 5-week trading range we have been in and that there was a good chance this week that the market would move out of this range. We cited Wednesday’s Apple announcement of the iPad3 and Friday’s jobs figures as the two key events that would make or break the bulls push higher.
Often times when resistance is being tested, the indexes tend to overshoot these levels which we have been calling our “fluff” targets”. We said the Dow would move 1,000 points back in late November when the index was at 11,800 and we said the blue-chips would run into resistance at 12,800. We hit this mark in January. We also said if the Dow closed above this level there would be a chance at 13,000. If this level was cleared we said to watch for 13,250. To the downside, we said short-term support was at 12,900 and then 12,800 which is exactly where the Dow has been hovering. The index is currently down 193 points to 12,770.
We also said to look for a close above 1,375 for the S&P 500, which we haven’t gotten, and that if there were further weakness the bulls would need to hold 1,350. The index is down 20 points to 1,344 after opening at 1,363.63 which now bring 1,325-1,300 into the picture.
The Nasdaq is lower by 40 points to 2,910. Tech opened at 2,917and we said a dip below 2,925 would bring 2,900-2,850 into play. Here we are. Apple (AAPL, $529.07, down $4.09) is also lower and another clue we said to watch for.
The S&P Volatility Index (VIX, 21.55, up 1.98) is up 14% and above 20 for the first time since mid-February. This was another clue we said to watch for in Sunday’s Weekly Wrap.
We said there may be an opportunity to add a NEW TRADE or two today and that is what we are doing. Subscribers, check the Members Area for the updates and be sure to use limit orders to get the best fill prices.
