We saw the S&P 500 do what we discussed in this morning’s Opening Print: sellers and buyers in a dance back and forth. After a 10-handle selloff on the open, the market found support and rallied back. From our viewpoint, we saw an “accordion” of sell stops getting hit, one after another.
We continue to suspect that institutions use the short sellers to drive prices down, creating bargains. Then as those sellers start to cover, it triggers a series of buy stops which add momentum to the new buying, driving the price still further upwards.
From the low of 1961, the market moved midmorning up to a resistance trendline, hesitated, then drove up another eight points to the day’s high of 1976.25. With the large volume of news coming up, most of it expected to be bullish, we anticipate more of this price swinging before a drive to new highs after the FOMC meeting ends, especially if Europe’s unemployment numbers are positive along with the expected positive US numbers.
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HIGH: 1976.00 Early
LOW: 1961.30 Mid-Morning/Then Late
LAST: 1973.20 UP 1.8 Handles
TOTAL VOLUME: 1.3mil minis; 1.9k bigs
MOC: BUY $250mil
FOR TOMORROW:
FOMC Meeting Begins
Redbook
S&P Case-Shiller HPI
Consumer Confidence
5yr. Note Auction
Mutual Fund Monday up 9 of last 12, but down 3 of the last 5.
Pit Bulls rule about weakness last week of July to 3rd week of August.
Get everyone to sell roll down, then use the shorts to help push things back up.