Good Morning, Friends. We got the much-anticipated bounce late yesterday, which was supposedly occasioned by an absolutely banal comment concerning Eurzone bank capitalization by European Commissioner Olli Rehn. Suffice it to say on that subject “EU says no concrete bank recapitalization plan right now.”
So, here we are, and most of the people to whom I speak – not necessarily a representative sample – are basically looking for new and improved levels to sell again, typically somewhere between 1150 and 1200. Futures are off their best levels of the morning, but still positive as I type, and plenty of headline risk remains. My sense is that if the market begins to sag again, it will be pushed lower quickly by traders fearful of losing the opportunity to get short near the top.
I don’t have any firm plans thus far this morning. I was able to extricate myself from almost all of my (smallish) long positions into the afternoon ramp-up. Given the hourly and daily charts, my overall bias remains short, and on the appended hourly chart, 1150 certainly looks like potentially strong resistance.
Todd recommends waiting through at least the first half hour before getting involved in a session; that seems like even better advice than usual this morning. Best of luck.