Friday, March 12, 2010

Midday Briefing for March 12th: Forming a Range

After an early morning sell-off, we've consolidated just below overnight lows, near the 3/10 highs that had been resistance. As a rule, markets spend more time making tops than bottoms. That generally leads me to look for rising markets turning into bracketing ones, not into falling ones. The action thus far today, which shows only 123 more advancing issues than decliners and a mixed NYSE TICK, is more consistent with a range trade than one trending to the downside. Currencies vs. USD have been relatively strong, but we're seeing weakness in the oil market. All told, this is a mixed picture and perhaps the start of a topping process that will extend into next week.


OKL said...

commodities are not doing too well given USD weakness, treasuries are rippin today... pretty curious stuff in all, especially since the retail data was somewhat decent.

maybe its all about FOMC nxt week and exit strategy.

Yann said...

A bit of market wisdom brought by Art Huprich from Raymond James:

"Finally, in looking back at some of my old notes I was fortunate enough to come upon a piece of “stock market wisdom” that a former colleague used to always stress, likely due to his years of experience, specifically:
I would point out that very often when the market approaches a significant level it usually does one of two things. 1) It pauses just below that level and then goes through, or 2) it moves though that level and then pulls back.

S&P 500 (1145.61): January peaks (resistance) are between 1148 &1150.45 (closing high = 1150.23). 3/10/10 intraday high =1148.
DJIA (10567.33): January peaks = 10709 to 10730 (closing high = 10725.43). 3/9/10 intraday high = 10613.

I think we are currently experiencing the “pause” or consolidation, and as long as the internals remain strong or volume doesn’t start expanding on “down days”, new reactionary highs by these indices are coming."

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