Friday, July 8, 2011

Stock Market $SPX Update July 8

Pullback is in full force. It just had to happen. Market always looks for excuses to take profits, none bigger than NFP. Is this the end if rally? Earnings reports next week will tell. If the results are disappointing market will sell off more.

Technicals: we were overbought on SPX. All indicators were scraping the ceiling. There was simply no more room to go up. This said, stochastic is embedded in buy on daily. So this pullback will be met with buying at 8 ema first and 50/100 dsma laminate after that, with 38.2% fib just above that. Be nimble and beware of the Q2 earnings risk.

Thank God for some two-way action and volatility. Speaking of which, OPEX week is next. Look for some pinning and max pain plays. Good luck!

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