Thursday, March 4, 2010

03/03: Markets pronounced dead. Second day of flat-lining

Markets chopped around during the middle day of the trading week, with the S&P500 up fractionally (and less than 0.1%) to close at 1119. The I-D high and low values of the index were 1126 and 1117, respectively. Of particular note, price action dipped aggressively below the 50SMA (using 15 minute bars) with a long thrust in the 2:00p (EST) hour. Here's a 10-day from the customary source:

The other two main benchmarks were likewise little changed: the DJIA settled at 10397 after a dip of 0.1%, while the NASDAQ closed unchanged from Tuesday, i.e. at 2281.

In my own trade, I scurried away from long positions taken at Tuesday's close, selling each into strength near the market's open, and reaping slight gains on each position. In the case of BA, I was concerned that Tuesday's resistance of $65.00 would not be broken. Indeed, price action retreated to below the 50SMA (using 15-minute bars). Here's what bigcharts says:

With regards to BAC, $16.57-16.60 is a significant support/resistance level at multiple points on a 60-day; hence, it was a logical exit position. Indeed, price retreated upon hitting an intra-day high of $16.62. Here's a 10-day:

Regarding QCOM, I likewise pulled the sell trigger as price approached the upper demarcation of an important price channel off the 60-day. Indeed, price action consolidated just under the price channel for the remainder of the session -- a bullish sign compared to the alternative of pulling back strongly. I expect to re-enter a long QCOM position if I perceive a durable break above the upper price channel during today's trade. Here's a 60-day (1-hour bars) from ThinkOrSwim:

In closing, I expect another subdued trading day today ahead of tomorrow's critical BLS employment report. Indeed, /ES futures (e-mini S&P500 futures, a 24-hour market) are currently showing only slight change compared to yesterday's close -- up about 2 points -- indicating that markets will open with only slight change. Yet no bets are certain vis-a-vis the equity markets; a forecast sleeper could turn out to be a thriller. Good luck, snake oil salesmen!

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