June 18, 2008
The bears continue to trounce upon every hope the bulls once held dear, as the markets once again sold off about -1% on the day. Oil was up after spending most of the morning in the red, and the financials are still causing worries for Wall Street.
Here’s the deal…rising oil prices have made it nearly impossible for the market’s to put together any substantial rally. But throw in the continued problems we are seeing in the finance sector, and there is a lot of overhead pressures facing the market, that will literally stomp on any attempt the bulls put together to rally the markets.
One thing worth noting is that the Dow is back near its lows from January and March. Those levels will be heavily defended by the bulls in an attempt to rally the markets. Also we wouldn’t be surprised to see some type of Fed intervention (aka Plunge Protection Team) if those levels look like they are going to break. So we may look to initiate a trade on one of the Dow ETF’s to the long side. If you are a subscriber, you will be alerted to the trade before hand, under “Today’s Trades”. The price levels worth noting on the Dow are the lows from January (11,640) and March (11,730).
Here’s the NASDAQ and S&P Charts…