Steve-- Bond yields should have reacted much more positively to productivity numbers, they will only co-operate if market is sure about these week economic issues, they want to be pretty sure that FOMC may not have any viable reason to change the bias.. as you know that change of bias in FED is worth a 1500 points on DOW... even more..
I am not very sure about this level at 1364, you saw that it was printed but soon after that we practically went down and visited 1345 on SPC or 1348 area.
I still believe that until PPI and CPI are not out I am not going to play this market long side, I will rather be late than sorry, I have maintained my discipline and will do so until I have clear indication above 1364 level on SPM. I think that bond yields at 5.81 level are just too high for market at 1360 area, I will on Friday morning after the number trade on long side if Bond cracks 5.77.. that is my yardstick for me like yesterday these are movements with no consequence and people like us who thrive on momentum would not get in until I am sure that the spreads are covered within a day trade atleast, these markets are not providing me that comfort, it is strange for me a person with itch in hand to practically do a single a two trades a day, however patience always pay, we have excellent returns so far, we can play on the side momentum if it is on other down side nothing like it, we climbed the steep wall why not just to wait for a clear run..
We will have one soon, and most probably we will make the best of it which ever side it comes for me ideally it would be a visit to 2520 area again that is closing the gap on COMP and may be 1328 on SPM after that a bounce. I see this gap at 2520-2546 area with concern this would require filling, and I think we will see that within this move. I would think a bond yield at 5.85 will give us clear indication to short the market if you see that, so will be the reversal at 1328 or 2515-20 band or a bounce off 625-628 to close above 660 in a single session. I expect a dip and bounce within next few days let see how it plays.
If we break 2500 we surely go down to 2465 area, although we have this close above 2555 on COMP and we broke 650 on DOT. On DOT I am looking at this point 660, where I would like a close above solidly I can see on daily charts that until we have two closes above that we can develop a situation of lower highs... Good productivity and strong economy is great lets have this CPI and PPI out of the way for a decent run to 1430 area and a solid break of 660 on DOT to revisit 700 and 725 intermediate resistance..
We have been on side lines and inactive for quite some days but that is what I believe right now, just waiting to get in, I am trading on SPM future's and more often than not like last night we shorted at 1362 area. I have said this is a range bound market you can buy the interim dip and sell the interim top until we have this range taken out.
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