Snapshot Notes - November 6, 2007

As of:

SPX 1511

It's been a pretty lazy session after the initial pop and drop, with the indices slowly trying to climb back to their opening highs.

There isn't much popping up on my radar today, continuing a string of fairly edgeless sessions. There were a couple of potentially useful tidbits from yesterday that suggested a one- to three-day bounce ahead, but other than that it's been tough to find much of a confluence of studies and indicators pointing one way or the other.

That suggests that we're likely going to be headed for more choppy conditions, and I'm still looking to buy oversold and sell overbought readings. The trouble is that we're seeing a definite lack of either one, so I don't see the sense is taking any aggressive positions either way. These sorts of situations can become frustrating (it's hard to not feel the need to do *something*), but I'm trying to be patient and wait for what seems like a better short-term setup.

As of:

SPX 1511

HELP ARCHIVE

Good Tuesday morning...we begin the day with a gap up open in the major indices that so far has been able to hold. We're seeing a reflexive bounce in a few of the groups that have been hit hardest lately, namely the Banks and Brokers.

We left off yesterday afternoon with the idea that the indices may be getting weak enough to see a bounce like this. While finding solid "oversold" types of readings was still a difficult task, there were a couple of things lining up to suggest at least a one- to three-day reprieve.

Those factors included the gap down and failure to close that gap on Monday in the S&P 500. Previous instances of that occurring had led to a next-day gap open in 12 out of 13 instances, which I guess we can make 13 for 14 now. Mostly, the index was able to hold together for longer than just an opening gap, but much of the gain we saw in the previous instances was made during the open.

Also suggesting a possible bounce was the recent slice lower in the XBD Broker/Dealer Index. That sector has gotten hammered over the past three days, but it had reached a point that in the past has led to at least some short-term relief. And if the brokers were able to bounce, then the broader market surely should too.

So this morning's trading is pretty much in line with what we should have expected, now we just need to see if it can stick. I don't see much that's giving a strong indication one way or the other (in the short-term or intermediate-term), but the couple of things we went over yesterday seem intriguing enough to expect some relief for now. 1490 on the cash S&P 500 index has become THE level that short-term traders are watching, with a move (and hold) below that level likely to trigger additional selling pressure, during which I wouldn't wan to be long.

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