Wednesday, July 8, 2009
Big reversal today exactly where you would expect it to happen. 870 on the S&P 500. Heavy volume today as you would also expect around big technical levels. Tomorrow sets up very interestingly. Tomorrow morning you have same store sales by all the retailers. I am expecting June same store retail numbers to be horrible. You had bad weather, high gasoline prices, higher interest rates, more job losses, and comparison year over year that goes up against the stimulus checks that hit the consumer about this time last year. The problem is, naturally I think the market would have a big up day tomorrow. Big reversal bounce off resistance setting up for a move back to 890 before turning lower would be expected. My guess is if the numbers are anything less than absolutely horrid the path of least resistance will be up. I also think that bounce will be the opening to add to short exposure if you have been waiting to do so. I would bet very strongly that even if we hold 870 that was not the final test. My guess is even if we bounce we will test it one more time. So makes sense to add to short exposure if you get that bounce.