We broke the first level of short term support on the prior SP Futures Hourly chart and dropped quickly to the diagonal trendline around 828 where the bulls are trying to find a footing.
Although we still have some short positions for the 'daytrade' we have hedged them out now and are looking to buy weakness in the metals and oil.
Careful, since if we slip here we go down to test that support around 822 with some intermediate support and possibly the prior lows around 806.
Generally, we think the banks and traders are crabby that Tim didn't give them their fix, and are showing their displeasure. Therefore on 'context' and not the charts we'd look for 820 and even more probably 806 to hold. They are cranky but not yet openly self-destructive.
Do not rule out a snap back rally to stay within the trend, beartrap style.
If the Obama Administration would like to do something constructive in the markets Tim should announce some trading reforms like reinstatement of the uptick rule, a vigorous enforcement of the rules against naked shorting for all stocks, and aggregate position limits on commodities, But that is not the style of the compromiser. Something has to be done to restrain the blatant speculation while the banking system is sorted out and the investment banks die a slow death but are still capable of throwing their weight around. Recall that early in his Administration John F. Kennedy made a point of forcing Big Steel to very publicly roll back their price increases when they tested his resolve.
"They pull a knife, you pull a gun. They send one of yours to the hospital, you send one of theirs to the morgue."And presumably he would abstain or at least be very discreet with respect to high priced hookers crossing state lines.
