Technical Data

by Larry Levin

The market has been hammered lower eight straight days, until today.  If Wednesday had closed with even a miniscule loss it would have matched the worst consecutive losing streak since 1978.  With that in mind, Fraud Street bought the dip with a vengeance and thus avoided all of the bad press and the sure-to-follow Jimmy Carter "malaise" comparisons.  
 
Is this a support level?  Although one never knows for sure and there is a great deal of news coming out soon (read: Italian banking crisis and Fri Jobs data) we may get some support Thursday.  A major level of technical support that I mentioned on CNBC today was 1240.00 in the S&P.  While the market traded through it, it eventually held and led to a strong reversal with a positive close. Moreover, ES (mini) volume was 52% higher than the recent average and closed with net aggressive buyers over sellers...even if it was only +0.22%.  
 
If you wanted good news, that's about all I've got and I don't know how long a technical bounce will last.  If it can hold together for more than a few hours and the market ignores the sure-to-be bad Jobs Report on Friday, it just may pop back to the 1295.00 / 1300.00 levels.  A rally beyond there seems unlikely for the following reasons; fundamental economic news is awful, European banking crisis will soon be headline risk again, the S&P broke all of its higher support levels, the major indices have all closed below their respective 200-day MAs, and the S&P futures chart has finally broken the MAJOR channel going back to The Bernank's intervention policies that began in 2009 to rig the market.  Of course, this last point will be more influential if it has a weekly close under said channel.
 
Speaking of The Ben Bernank, don't worry about the markets too much, he's your ally: he does not believe in free markets and will soon undertake QE 3 to force the markets higher.
  

 

Trade Date: 8/3/11

E-Mini S&P Trades*

(before fees and commissions):

1. No "Secrets" trades filled today.

2. Algorithm positions (8)

3. "Reading the Tape" positions (6) ...combined Secret's, Algo, & "Reading the Tape" total...+20.75

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