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Blue Ice Failure

Once again Futures in the pre-market are all over the place with very fast price action and quick reversals. On the positive side, company earnings continue to come in very strong for the most part. Today I am once again suggesting extreme caution. The indexes are currently testing important price support levels. If they hold the worst of this selloff could be over, however, should they fail today day could be a very dismal day as we seek the next level of support? Falling to the 200-day morning average is not out of the question.
On the Calendar
The market could use some good news this morning, but there is no major report on the Economic Calendar today. In the National News, the government finally passed a budget in the wee hours of the morning avoiding a shutdown.
On the Earnings Calendar, we also get a break today with just under 50 companies expected to report.
Action Plan
The DIA, SPY and QQQ’s finally came to rest at or near a key level of price support. The major question for today is will it hold? With the SPY only 4 points away from the 200-day moving average I fear the selling could easily continue to test this important level. The QQQ’s would need to fall over 5 points to test the 200 while the DIA would need to decline a whopping 11 points to visit this important average. That would mean the Dow falls another 1100 points! So cross your fingers and hope the current price support holds.
With volatility so high anything is possible. This is a market for the very fast day traders and big institutions. As swing traders, we have no edge amidst the fast reversals and whipsaw price action. As a result, I continue to remind everyone that cash is a position and in the current market condition it’s a darn good one.
Trade wisely,
Doug
To watch video http://bit.ly/MorningMarketPrepFeb092018
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