S&P futures have the markets currently priced to open near yesterday’s close after a fairly large overnight range. Price failed overnight at the volume price of control (1430.00) and rotated lower to test Tuesday’s gap below. Since then buyers have stepped back in and stabilized things.
There are a few interesting characteristics in yesterday’s profile. The value area consumes all of the prior day’s range and is indicative of a wild auction with slight indecision. That’s of little surprise as the market was digesting the Ben and the The Fed in real time. Also interesting in where we closed yesterday, right near the value area low, which is to give the sellers a slight edge going into today’s trade.
The 1426-1427 level will be important today as a confluence of yesterday’s close and Tuesday and Wednesday’s value area lows. If price is sustained below this region sellers may target a gap fill back down to 1420 region. Should the market not find reactive buying at that point our next level of support is 1418.
Things get fun above 1434 value area high where the fading of the Fed pop began.
Shortest term, bears have a slight edge, but the swing trend is higher giving me patience on my long positions especially stocks like TSLA which are grinding higher. However, some ugly candles were printed yesterday which should have you considering clearing some weak positions from your portfolio.
UPDATE NOTE: I sold TSLA after the stock hot knifed lower.
Sold remaining $TSLA
— Raul (@IndexModel) December 13, 2012
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