A client asked me where I see the next support levels. So I drew my Fibonacci's and looked at a moving average as a back up in order to provide some information.
With a light economic calendar and but a full earnings calendar, we were broadsided with a downgrade in credit from the US to Europe (which included Greece). We have known that credit spreads have been widening, so is this a really nice buying opportunity? Will equities shrug this off like they have shrugged off Egyp, Libya, Japan and countless credit downgrades across the world? Will earnings still be strong enough to keep us near new highs? I figured we could stay at or near these high levels and maybe even above for another quarter or two, but if unemployment started to rise again, then we may be derailed as the fall session started up. I am curious to see how low we go and how many "support" levels we break. This "big" support level is the post-Japan 1250 area, but below that, it starts to become a little more fuzzy.
Prior to getting there, we have the 61.8 level which coincides with the 100 period exponential moving average.
Certain stocks are giving us some interesting levels as well:
You can sell May 12's for .30, which is about 2.5% in less than a month and you would end up owning BAC close to its major support level of 11.00.
Ford is still sitting on a long term trendline, is it enough of a discount to get back in?
I think you just have to use stops if you are buying equities at these high levels, but overall I think the trend should continue as it isn't broken yet.
Moving further into the socially responsible area, we may have a trend that is finally broken. Whole Foods:
Do we finally have our lower high scenario in place and can yo become bearish versus bullish to neutral?
Moving to forex, it was a huge standard deviation trading day with many BUFFALO BOUNCES as we had massive moves. Dollar strength on the equity breakdown and then the trend came back to help us get a few DOUBLE FALL LINE TRADES.
Looking forward to seeing how we close and then what tomorrow brings. Got to run as the equities are rallying and the GBP may give us one more DOUBLE FALL LINE TRADE on the day.
We have entry...
Happy Trading and Be Environmentally Cool
Coach Brian
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