Tuesday, August 04, 2009

Morning Briefing for August 4th: In Yesterday's Range

Going into today's trade, I'm still watching that ES 994 level from 7/30 to see if we stay above the prior several day trading range. I'm also watching to see if we can stay above the lows from yesterday's early trade. Thus far we're trading well back into yesterday's range; after the recent strength, which saw us register nearly 3000 fresh 20-day highs across the NYSE, NASDAQ, and ASE, some consolidation would not be surprising. I see that gold and oil are off their overnight lows and the U.S. dollar is off its highs. Those markets have been well correlated with stocks lately, so I'll be tracking their movement closely. Given recent market strength, I have to stay big picture bullish until the market can at least show that it can start accepting value at lower price levels. That's not happening as of yet. Sustaining prices below that 994 level in ES would be a start. If we cannot take out the overnight highs in ES during morning selling, I'd be looking for a return to the prior day's pivot and an eventual test of yesterday's highs.