G20 Summit Meeting Begins, Auto Industry Clock Ticking

March 31st, 2009

Good morning traders! As always, if you didn’t check out last night’s Trading Video I suggest you do that first thing this morning. On another note, the Affiliate Program that I started last week has been a huge hit. I already have 17 people who have earned Free Memberships in less than one week! I’ve tried to make it as profitable as possible and there are people who are absolutely taking advantage of it. Why not try it out right?

 

Now, getting back to the markets, the US futures are modestly higher this morning. My general feeling is that most of this is short coverings – similar to me closing half of my SPY puts yesterday. Yesterday the market dropped a bunch. It may need to rest, and perhaps it will continue up at a slower rate (shallower trendline). But what most investors don’t recognize is that other traders - including myself – still have some other shorts to ride down a little more. Although, a little upward movement is very healthy and actually gives anyone who missed the big fall a chance to get back into the action at better pricing.

 

Or of course a top could be in place. Some internals trading indicators suggest we are closer to a tradable top than bottom – or at the very least some overbought readings still need to be worked off before the next leg up can begin. The Put/Call hovered in the 0.70 – 0.75 area. It would have been unlikely to rally from that level, and as of now, more time is needed for it to rally and top out – i.e. we need more fear before the market can rally again.

 

Having said this, I have updated a couple of my stop levels on member’s shorts given how great yesterday was. I don’t want to give up everything we have gained thus far, but want to give these stocks room to run down. Below are the updated S&P support and resistance targets.

 

spx2

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