Market Analysis for Apr 1st, 2005
I was expecting a pullback today that is for sure... but nothing like this. The
combination of the upside momentum non-confirmations at this AM's high
of 1193.75 on the E-mini June S&P were enough for me to avoid the long side of the index early in
the session... But add to that the influence of a spike in crude oil prices to
new all-time highs at $57.70... and the pullback I was looking for- and that
we have seen- morphed into a route. Now what? The index is oversold now,
and has probed the upper portion of a critical support plateau between 1173
and 1166, which must contain the weaknes to preserve a pattern that my
work argues represents an incomplete counter-trend rally projected to the
1200-1202 area. Inability of the 1173-1166 area to contain the wekaness could
trigger additional free-for-all liquidation that drives the price structure quickly
towards the 1140 area. Of course, out of the corner of our eye, we will have to
be watching crude oil prices closely, either for signs of a peak, or signs of an
upside blow-off. MJP 04/1/05 9:15 AM 2 PM ET (1173.75)
For more of Mike Paulenoff, sign up for a FREE 30-Day Trial to his E-Mini/Index Futures diary. Or try his QQQ Trading Diary.