US stock futures point lower this morning after the GDP number came in a little light. There are also some overseas rumblings is pressuring the futures this morning.
Yesterday was a great day to take some profits as we had a “technical sell signal”. This occurs when you push through a defined high and come back below. Combine that with Wednesday “capitulation” buying or short covering and it made it a prudent day to take a step back and limit some risk.
SPY level to watch is yesterday’s low of $131.36, which we are opening below. A 30-60 minute close below this and we should get more downside.
A short term important level in my opinion is $130.60-$130.80 SPY, which is the five-day support. A daily close below this level and the accelerated uptrend will be breached. This would have momentum traders probably looking for more shorts and less risk (S&P 1305-$1308). I think $128.80-129.20 will be a more compelling spot.
Tons of push through failures in a lot of stocks, so same thoughts as the SPY.
Disclosures: Scott Redler is long SPY, OIH, WMT, LULU, X, GOOG, WYNN, GERN, KV.a, VXX. Short DIA, LVS.
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