Read Larry Connors' blog – Short Term Trading Strategies
From last night's update: If we see early weakness, the bulls should try and support the 1034 level. If that fails, support drops down to the 1028. Any rally attempt should find some bears waiting at the 1054-1059 pivots and then 1062.
Review of previous night's notes and today's tape: The euro/usd stopped the free fall last night, which took any selling pressure off the spx futures in overnight trading. DaBoyz were able to use the lite volume day to lift the spx away from harms way. (breaking through the important 1039 pivot)
So they have left both bulls and bears hanging with today’s close. The spx never broke through the important 1039 pivot and the bulls can hang on to the drop from the highs only being a wave 4 down and we are now starting wave 5 up. The bears can hang onto today’s high was held down right at the 62% retracement level and today was a low volume wave 2 up.
It is tough to pick a side here with 100% certainty, but with the weakness in the euro/usd, I am leaning on the side of the bears. If I see the euro/usd catch a bid and turn, then obviously the bulls would have the upper hand with the short term charts.
Bottom line: The indexes closed right at a pivot area where both the bulls and bears can make a good case for the intermediate term direction of the tape. Tuesday may be an important piece of the puzzle.
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.
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 zero reading tonight, which is null reading for the markets on Tuesday.
Sentiment Indicator: (contrarian indicators) The short term sentiment indicator (1-3 days) is approaching bullish territory. Intermediate term sentiment indicator (5-10 days) remains in neutral/bearish territory, even with today’s big move higher. The longer term sentiment indicator (3-6 weeks) is in neutral bullish territory.
Bottom line: With the short term indicator approaching bullish territory and the intermediate term still in bearish territory, we have a neutral outlook for the short term tape.
"Smart Money" Trend The smart money was quiet again today, but steadily on te sell side throughout the day. But with the low volume, I am not so sure we should bank too much on today’s selling.
For Tomorrow: Support for the spx sits at 1053 and then 1049. Resistance pivots are at 1069 and then 1071.
Gary
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