Firm's morning note

the S&P 500 is well above its’ intermediate term down trend line and still within the confines of an upward sloping price channel. Both of these are positive conditions. However, the index is currently stuck in a bit of a resistance zone with the 873 level coinciding with a 2/3rds retracement of the last peak to trough sell off. Since the whole crystal ball thing is a scam (Lol !) trialing stops and risk management techniques give investors the best ability to do the following here; patient here, keep the upside potential of the market (should it keep rallying) and also lock in gains in the event the market stalls here.

Volume has moderated at present S&P 500 levels, which while not alarming, suggests buyers are being more discriminating and patient about new purchases (versus say just 2 weeks ago). The CBOE Total Equity/Index Put to Call Ratio (not seen in this report) has slipped to under 0.70, typically a short-term negative. Near term these resistance areas may present a minor challenge to overcome, particularly with the CBOE Total Equity/Index Put/Call ratio so low. We would watch closely here how stock’s trade today/tomorrow on this Goldman news to repay TARP. Part of the rally the past few weeks, in addition to other factors, may have been predicated on select investors catching early wind of Wells Fargo’s (WFC) strong quarter as well as Goldman’s (GS) and positioning ahead of it.

Best.

Kevin Lane
FusionIQ



posted by Peter Greene