Zeev, I believe it was Bobby Bearra who said the battle is between the Bears and the Bulls, and it is unclear who will win.
The last run to the May high in the COMPX stopped at the upper level of resistance on the NDX. Likewise, the COMPX stopped when the NDX hit resistance at 1775. I guess what I'm saying is that if the NDX goes below 1775, it would be logical for every other index to fail their support also.
That said, I agree that we should get into the 2057-2100 range this week, and I really don't think 2057 will be pierced with options expiration looming. If we drop by Wednesday to that range, Max Pain could bring everything back up to 2150 for Triple Witching on Friday.
Some Max Pain Levels:
QQQ-46
CSCO-20 (20.49 now)
ORCL-15 (17.01 now)
SUNW-17-1/2 (17.01 now)
INTC-30 (30.67 now)
MSFT-70 (73.19 now)
QCOM-65 (61.24 now)
Looking further down the road, I can't seem to find the schedule for the next B2B numbers.
Those numbers should have a pretty strong impact on the market, and it's looking like they will be lower than last month based upon warnings we've been seeing in the Semi's this week.
Cycles seem to indicate the 20th is an interim high and the 27th a bottom. That doesn't seem to work real well with the economic calendar, so that's why it would be good to know the B2B release.
Fed Bias will be more important than a rate cut of 50BP, IMO.
The problem I have with a near term drop to 1850 is that it is hard to see a window where it can happen within the above scenario. I agree that the market doesn't necessarily do what it's supposed to do, but the couple of days before the Fed seem to be the only time when it could happen, and I can't recall seeing lows that close to a meeting. |
