Read Larry Connors' blog – Short Term Trading Strategies
From last night's update: I am expecting very little volume and I really am not expecting much for the day. But the jobs data is a wild card and could spark some type of move. Watch the 930-934 on the upside and 917-912 on the downside.
Review of previous night's notes and today's tape: The jobs number wild card came into play Thursday and the indexes got smoked. The spx gapped right through the lower support pivot and the bull’s only line of defense was the sound of the bell. The volume was light as expected, but that should have given the bulls a chance to try and hold things up, but they wanted nothing the do with supporting the free fall.
We are approaching some support levels and the tape is pretty oversold on all of the charts. I am expecting some type of counter rally in the coming hours/days, which should be followed by another round of selling once completed. The head/shoulders pattern is clear as day and everybody is watching it. I would be a little surprised if it actually plays out, as it is way too advertised. But the landing zone for the pattern does make sense, so maybe it will play out.
Bottom line: The spx is approaching some support areas where we should see a counter move to the upside hit the tape soon. Use it as a shoring opportunity.
Mel’s Corner: This is going to be a new addition to our site for any members looking for the next day’s trend through a unique system designed by Mel. It will be an additional charge to our service if you would like to join and I will keep you in the loop when we are going to launch the ad on. In the meantime, I will post his technical trend indicator so you can track his results.
Numbers range from -20 thru 20. -3 thru 3 are "null" signals.
Negative numbers are bearish, positive numbers are bullish for the next trading day.
Mel’s trend finder indicator gave a +10 reading tonight, which is a bullish reading for the markets on Monday.
Sentiment Indicator: (contrarian indicators) The short term sentiment indicator (1-3 days) has moved down to the extreme bearish levels as expected. The intermediate term (5-10 days) sentiment indicator s remains in neutral territory, but closing in on the extreme bearish levels. The longer term sentiment indicator (3-6 weeks) remains in neutral territory and still has plenty of room on the downside to reach bearish extremes.
Bottom line: The short indicator is opening the door for a bounce in the coming days, as it is now at the extreme bearish levels.
"Smart Money" Trend The smart money showed a big buy volume surge as the indexes gapped down. They have still accumulated a lot of selling volume over the last 4 months that needs to be worked off.
Bottom line: The big buying surge that took place on Thursday could affect the tape higher in the coming days/hours.
For Tomorrow: If we see early weakness carried into Monday, watch for the 893-888 pivot zone for support. If we see early strength, watch the 909-914 pivot zone for short entries.
The video report has been updated
Good Night!!
Gary
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