World markets were fairly quiet overnight but most are finding some footing after being in correction mode for the past week or so. S&P futures are up 6-7 handles after putting in a new pivot low in at 1775ish yesterday above the 50-day and the prior pivot high from November.
The Russell 2000 (IWM) was the first index to bounce yesterday giving some clues that covering shorts and testing some longs could be the prudent way to go. Whenever the oscillator gets to -60ish its ways a good time to at least cover some shorts. Now we see “what type of bounce” we have to measure future intermediate-term direction.
If sellers wand to remain is a bit of control, they should not let the bulls reclaim 1796-1801 in coming sessions. While the market has been somewhat choppy, there are still lots of tactical things to do as we uncover them most of the week in Off the Charts and our other products.
The media’s latest obsession is the nomination of former Bank of Israel head Stanley Fischer as vice chair of the Federal Reserve as Janet Yellen is set to ascend from that post into the Chairman role. There is speculation about how his views could impact the Fed, including his belief that the Fed should not provide forward guidance because it truly doesn’t know what it’s going to do.
Opinion right now seems mixed on whether the Fed could do a small QE taper at next week’s meeting. In recent speeches, Fed officials have been sending very mixed messages and seem to have several differing ideologies among them. I think they will hold off until March, but will not trade based on that guess – as always I will simply obey the price action and key levels.
Disclosure: Scott Redler has no positions