Firm morning comments 3/27

Not much to say today that hasn't been said the last few days (ie. running into resistance and make strategic trims). Futures are down this AM after the market slammed up into the resistance areas yesterday that we had highlighted in our S&P 500 notes the last few days.We don't expect a deep, deep correction yet and expect the market once it pulls back enough (we will do an S&P 500 report for Monday to highlight levels traders may want to dip their toe back in on the long side) to make another attempt at this resistance level.If this second attempt fails then one could expect a deeper retesting sequence. However we would bet the market will set a higher low and do it on less downside momentum. This would then set the floor for a longer more durable rally.

However as we know market conditions can always change on a dime which is why we track internals constantly. Internal readings such as up to down volume ratios and advance to decline ratios help us handicap the footprint left by large institutions. And though they can be wrong at times when they collectively deploy their liquidity it is a wave you want to ride (on the upside) or avoid (or short) on the downside.

posted by Peter Greene