Friday, September 25, 2009
Morning Briefing for September 25th: Probing the Lows
After a bounce overnight, we saw selling re-enter the market on the durable goods report, taking the dollar higher and gold, oil, and 10-year yields lower. Right now, as we can see in the ES chart above, we're trying to stabilize in the area of yesterday's lows. I am watching the intermarket picture closely, as well as buying/selling sentiment early in the day to assess the odds of sustaining weakness below yesterday's lows vs. moving back into the thick of the volume range identified in yesterday's post.
It is not at all clear to me that the bull has ended with the recent market pullback. Rather, per my weekend indicator comments, I suspect that we've seen a momentum high and now have entered a topping process. If so, we should be able to stabilize at lower levels before making a test of the bull highs. I'm watching for indications of such stabilization/bottoming and will be updating observations via Twitter (follow here).