February 7, 2013

Market Update | Choppy Trade Leaves Traders on the Sidelines and the Markets Still Overbought

Wednesday’s market action was choppy at best. Again, the bulls are not willing to give much here believing that any downside is a gift to get long or longer! Unfortunately, this does nothing to change the near term picture. Technically, the markets and most equities are still at extreme overbought levels. With volatility remaining very low this does not leave much in the way of trading. Support and resistance levels held intraday, as it appears everyone is waiting for tomorrow’s economic numbers.

Slow, sloppy trade though does give time to look for opportunities and Treasuries appear ready to rally again. Outside of trading T- bond futures, I prefer TLT (long bond ETF) and TBT (short bond ETF) for trading. Intraday price volatility has increased providing opportunities for scalp swing and trend trades.

See this post on correlation.

Intraday Support and resistance zones (daily) to watch for:

DJIA: support at 13,800 and resistance at 13,965 to 14,150
SPX: support at 1505, 1495 and resistance at 1515 to 1525

Treasuries:

30yr – support at 142’16 to 141’16 and resistance at 143’29 to 144’12
10yr – support at 131’14 to 131’06 and resistance at 131’22 to 131’26

TLT – support at 116.50, 116.00, 115.50 and resistance at 117.15, 117.85, and 118.20
TBT – support at 67, 66. 55 and resistance at 68.10, 68.70, 69.15

Stocks:

AAPL: support at 452, 440 – 439 and resistance at 469, 481
GS: support at 146 to 143 and resistance at 151 to 152

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