Market Analysis for Nov 10th, 2003

This morning the markets have followed through to the downside from Friday's employment report high, as it was. In the E-Mini S&P, 1064 , was Friday's employment report high, and this morning's low was 1047.75, so there's been quite a substantial down-leg from what was construed as terrific economic news.

That's on an intermediate term basis that we've had a down-move on otherwise positive economic news. But from a micro perspective the action overnight rallied the E-Mini S&P from about 1049 to 1053 ,-3/4, and it has since made a marginal new low from Friday at 1047.75.

Our work is telling us that the marginal new low, or the area around 1046-47, will probably suffice as the end of the initial down-leg from Friday's high in the E-Mini S&P, and that there could be a bounce from the 1046 area that probably gets back towards 1052-53 at some point later in the session.

However, this is not an invitation to be long. I think that the chart structure from Friday's high into Monday's low suggests bearishness, and after the next rally or bounce, there will be more selling pressure ahead.

As far as the E-Mini Nasdaq goes, we had a high Friday of 1458 1/2, and made new reaction lows this morning at 1425. Somewhere around that 1425-1423 area, my suspicion is this leg will be complete from 1058 ,, and that there'll be a bounce forthcoming. But I expect just a bounce within an otherwise bearish structure that started last Friday, and after the bounce I expect the rally to give way to another down-leg.

So, really, the opportunities now, I think, are in selling strength, not buying weakness.

For more of Mike Paulenoff, sign up for a FREE 30-Day Trial to his E-Mini/Index Futures diary at. Or try his new QQQ Trading Diary.