Futures are up a this morning as the markets go on Day #2 of the oversold bounce. McClellan Oscillator went from (-92ish) to (-50ish).
We are going from extremely oversold to just mildly, so this type of feeble bounce can continue until we test certain broken trend lines as this is a usual scenario. Yesterday’s action was a bit lethargic but strategies both long and short did work in defined areas.
Today we have jobless claims at 8:30, US trade balance and PPI. There will also be several Federal Reserve Presidents making their rounds.
More Importantly we have Google (GOOG) earnings tonight with China GDP#’s and then JP Morgan (JPM) in the morning. So there will be some action. I’ll give some levels with the SPY.
SPY first resistance today will be yesterday’s high combined with the 50day- that stands around $137.54. The next area is $137.84-138.34 (this spot would be an area to sell some longs if you believe this is only an oversold bounce). The $138.78 level starts the Gap from April 9th, and it gets filled up to $139.26 (if the Bears have any control they would protect this area).
SPY support is yesterday’s low of $136.75, then Tuesday’s low 135.76, and Major-Major is at 133.75-134.25.
Some stocks still act very well as we’ve also seen some small changes in character in a few of the leaders. Watch the action close and know your time frame. In my late afternoon note I will talk about a Google option strategy, or on my radio closer to 3:30.
Disclosure: Scott Redler is long SPY, JPM, DNKN, RENN. Short AAPL.