Wednesday, March 31, 2010

Morning Briefing for March 31st: Shifting Lower

9:13 AM CT - I added the top chart to show how we made fresh morning lows before 9 AM CT, but those lows were accompanied by relatively modest negative TICK readings and a non-confirmation from the Russell 2000 stocks. Seeing the divergence, I bought some IWM and rode a pop higher toward the top of the morning and yesterday afternoon ranges. It's a nice little illustration of how choosing what you're trading (a relative strength leader if you're expecting a rise) is as important as getting your timing right.

We've pulled back into the multiday trading range in early trade today, breaking below the range of the past two trading sessions. I'm now looking to see if we can sustain price and build value below yesterday's low price. Despite the stock weakness, other risk assets are firm: USD is weak vs. euro and we're seeing some strength in gold and oil; rates are a bit lower. Also, we're not yet seeing the Russell 2000 Index or the NASDAQ 100 set up for new lows relative to yesterday; I'll be watching closely to see if those divergences continue. More later this AM--