9:00am (EST)
The bulls tried their best to rebound on Wednesday and did well for the first half of trading. However, Fed Speak keep a lid on any gains and pushed the market lower in the second half as the bears extended their winning streak to 2-straight sessions.
The Dow lost 25 points, or 0.2%, to finish at 13,077. The blue-chips tried to make a run at 13,200 which is now serving as short-term resistance but could only muster a high of 13,155. The low for the session was 13,063 and the index is less than 1% away from breaking below 13,000.
The S&P 500 slipped 4 points, or 0.3%, to settle at 1,408. The index tested a high of 1,420 but never really mounted a threat at 1,425 that was prior support now serving as resistance. The low for the day came at 1,407 and paper-thin support is at 1,400.
The Nasdaq fell 9 points, or 0.3%, to end at 2,981. Tech opened at 3,011 and reached a peak of 3,012 but started to fade in the first hour of trading. The index kissed a low of 2,978 and a drop below 2,975 would indicate a test to 2,950 is coming.
It will be important for us to watch for a possible bounce off Dow 13,000, S&P 1,400 and Nasdaq 2,950 because these are important round support numbers. The Dow and S&P are right near their 100-day Moving Averages (MA) while the Nasdaq is in between its 100-day and 200-day MA.
If current levels hold this week, we could get an end of month rally and then we will have to go from there. If the indexes close below their 200-day MA’s then we expect the final leg of the 5% pullback we have called for to be complete (and then maybe a slight rally).
We closed out 2 more winning trades for the Daily yesterday and took half profits on another trade as we continue to try and stay one step ahead of this market. This means we have room for new trades over the short-term and we have added a bevy of possible new plays to our Watch List.
Since mid-August, we are 24-7 with 6 triple-digit winning trades, including one that was up nearly 200%! This is a success rate of nearly 80% and for 2012 we are batting .750, or 75%, for all of our trade recommendations. Considering there are hedge funds liquidating and a majority of the mutual fund managers are underperforming the market in 2012, we would say we are doing well navigating the “most hated rally in history”.
The funny thing is, if support doesn’t hold, and the market does drop another 5%-10%, the same knuckleheads will be calling it the most hated bear market of all-time. Stick with us. We will get you through up, down, and flat markets because it’s all about doing the homework which we don’t mind doing.
We are looking to continue our hot streak so stay locked-and-loaded in case we see something we like this morning. There are 2 trades we are thisclose to adding.
As we head to press, futures are up/ down and look like this: Dow (+60); S&P 500 (+8); Nasdaq (+18).