I see a close below 1292 we could not maintain the move above 1302, however it was DOW that sold out solid, NDX and COMP really did not budge,rather SOX was higher, for me it is perfectly within context of my strategy where I have repeatedly asserted that Techs and DOW would diverge, cyclicals will be hardest hit where Techs will take off, I see my NDX 2020 support intact, with DOW down 200 plus points NDX was off by 8 points, that in term of market tells me that leadership was not slaughtered, it was for outside a broad sell off for insiders just a blip, I had to get out of my newly established positions at break of 1292, more to do with discipline I will re-enter as I think that BKX is oversold and will progress. I left my AOL MER C AMZN as is.
SOX support was not only held but we saw good positive movement in SOX.. above 395 SOX is a good solid buy.
DOT revisited the lows but selling momentum in pits on SPM and fluid NDX options was just not available, it was difficult to cover the spread as market listlessly drifted down, that indicates to me lack of selling, it haad to be NDX and COMP if yesterday 1292 wa a decisive break. I am gooing to watch 1278 very closely and 2020 alongwith 382 on Techs if these supports are holding well we move back up above 1292 today, may be BKX at 820 will give that lift.
MER closed at 83 a good indicator, I would consider that BKX will move soon and 750 puts and 860 calls for July can be a great play, on individual stocks I will certainly maintain my present positions on MER and C and would like to add MEL to the list, AXP is a good stock also. I would enter once 1302 is taken out once again on SPM, it is rather a safer strategy.
NDX 2020 remains a strong support, we should see that hold well if rebound is anticipted today below NDX 1992 full 62 points I think this SPM break will take us all the way to 1250 support, I expect that 2020 to hold well today plus minus 10 points, today global markets will do notice DOW sell off a little more and we may see some impact on opening which I would consider to be normal as Europe would like to see what happens to DOW, for simple reason DOW is the most important barometer whereas NDX and COMP are neglected, the 100 stocks with exorbitant P/E's have been responsible for underlying rally not the DOW stocks. COMP from lows of 1310 in Oct 98 has nearly gained 1000 points, a good 80% move up whereas DOW from 7200 lows has only gained 3500 points a near 50% move, if leaders are bid this market will surprise the shorts, the leaders have to break before a meaningful falls comes in, the Techs I have reiterated many a times will see a diverging pattern last night we saw manifestation of that very clearly, if BKX picks steam that divergence between may narrow a bit. DOW has the potential to move down to 9800 my oft stated level, but the hardest part of selling in Techs will only come if SOX PSE 372 and 500 supports are taken out, we may see some pressures today but momentum of selling was missing, I would like to add some puts if that momentum develops right now wesaw a loss of 20 points on SPM but without much of big volatility.
I have now important 2020 support and if that holds even if we see 1278 on SPM we will bounce, that support need to be taken out, my strategy would be to watch the support and COMP at 2020 2380 area, SOX 382 and DOT retest of 550 if this market has to go up we may see a quick rebound after a qucik test, I will take the cue of the market from the most sensitive NDX index and 820 on BKX quote.yahoo.com^BKX&d=5d, I will not be surprised that we may have written this banking sector which now shows some life a bit too early, rumors of MER buying of a major lifted MER sharply.
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