Tuesday, May 15, 2012

Tuesday Evening

S&P futures 30min chart

Today was the 5th day the S&P futures faded into the close. Several indicators (sentiment & technical) are suggesting we are getting close to an important low. The big question is... at what level will it come?

You can see that the fan lines I've drawn in have marked some important targets so far. The lower fan line that you can't see matches up to about 1315-1320 for tomorrow. One interesting thing to note is the action in 10yr Treasury futures today. As the S&P futures dropped to new lows on the day, 10yr Treasury futures meandered around and did nothing. Sometimes that can be a heads up that equity index futures are getting ahead of themselves on the downside... so it's something I'll be watching closely tomorrow. Another interesting thing to note is the action in the Russell futures. The bulls held 775 again today as the S&P futures made new lows.

All things considered, I think we are setting up nicely for a summer rally. I'm being patient before entering on the long side... and will be looking for a solid move above 1363ish on S&P futures and 800ish in Russell futures for confirmation to get heavier on buying dips.

Tuesday Afternoon

CRM (11:50AM)
CRM reports Thursday after market.  It has held above the support line and I am hopeful that it will continue moving toward the resistance line around 150.  I will not be holding this through earnings and actually have half of my position for sale.  It should trigger if the stock reaches 141ish.

I don't think we will see any meaningful upside for the SP-500 unless there is surprise good news from Europe.  I am maintaining very high levels of cash.
Stare at the red dot on the image for thirty seconds.  Then look away, blinking several times and look at a white wall.  




As images get impressed upon our "sight", so can thinking....we have long been spoiled by the seemingly ever present dip buyers for quite some time.  The market complexion has clearly changed and it is time to readjust out "view".