Morning Call: Open Gap Bought
November 18, 2008 11:51 AM
The gap down this morning was bought. This appears to be a trend day higher, thus far. I said yesterday that I expected a gap down today to be bought. Exactly what happened at the open. Currently it made a reversal off the high, but this is likely more sma related. The moving averages may slow the advance down early today and strength will likely grow with time as long as this low holds. This is what i consider a close day. Therefore, if this low holds, I expect that the high will not be seen until the last 15 minutes of the day.
11:54 update: I just looked at the chart again. The open low had cleared and we do not have a firm low, as I view the markets. This is a little more shaky than it appeared at first glance. This is a close day however, and we will likely see a move - one way or another- into the close. We have to close positive. My guess is here the shorts will remain on the sidelines until GM is resolved, one way or another. So we may have one sided trade today to the long side, I am not sure. I still believe the market is in a holding pattern until GM is resolved. The clear problem is that any GM news may come out when the market is not open. The shorts or longs, depending on how it goes, will likely get crushed. So I expect more days of very low volume.
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If 865 clears, which I believe it eventually will, it should run until at least 870 or higher…. this has all the makings of a gap trend day higher, thus far
actually, I just looked at the chart closer…. it is not what I saw at first glance… I had to grab my glasses… ha. The open low cleared, and we have no firm low…. that makes me a bit more skeptical here, to say the least… so I updated my post I made about 5 mins ago
hmmm i looked at SPY to try and get a better feel for what may have happened on the futures charts… I have to guess here…. the open low MAY have held on the futures… I am not sure… the cash market clearly did not…. the low on SPY was made early and that has never cleared, albeit by one penny… hmmm
ok… anyhow… i am not sure here… I would rather see a firm firm low that can be counted on…. BUT the low of the day is right on the trend break… so that makes sense….. anyhow, the close is ALL that matters today… so get ready for some late volatility… I still think GM in a holding pattern will likely limit moves today, in both directions, most likely… but short covering can get out of hand, as we have seen
I still would like to see the low cleared and reverse hard… this open is not normally a trend day higher as I thought when I first glance…. I think today is going to be very difficult on low volume…. this may trade like a fed day… with never having firm lows… because I believe the shorts will sit it out
The issue here is it is VERY early in the day… any move this early is really not important… close day… expect the true direction to be made in the last hour..sorry, but thats just the way it is
Taking out the high was important… it “frees up” the chart for a later run to the upside… sma’s are clearly causing an issue here… the Dow high was a direct hit on a line
I want a newww lowwww …. but i may be dreaming today… this looks a lot like a fed day, thus far….my guess is very very low volume… but havent looked
Both the dow and sp lows appear to be right on a daily trend break line…. I am not a fan of trend breaks, but it is what it is
ok, here is what may be going on… unless the sp chart is wrong… which is possible… the Dow open low never cleared…the sp chart says it clearly did….ughhh thanks for making this clear… anyhow…. the Dow low is probably the key… if that clears …especially late in the day… trouble is likely…. I do not think it will clear however..low low volume….
No firm high or low on the SP, good and bad…. we will likely reverse near the low…or try… the traders probably want some sort of a rejection to take this positive into the close- or try
ughhhh… I swear the data changes on BigCharts… perhaps the data is changed somehow when erroneous trades are removed… I have no idea… the SP did not make a firm low when I looked 3 times before… now it shows it did… amazing… I cant explain it other than maybe I am just seeing it wrong sometimes… but i do not think so
If it made a firm low earlier… and who knows at this point, the trade should be long above the low here… close day… and its early… if this low clears…on the dow and sp… im not sure what will happen as its early… but its probably not good
848… about a 2 point risk here, as i see things… traders should attempt to hold this low i believe
hmmm holding by a penny… doesnt look good…it still could reverse if clears… it is just simply too early in the day to know
cleared… this should get traders nervous….let’s see
yep 3 point spike down already
841.. make that 4… we have to go lower IMO
841.84 has been the low, in theory this should not be the low
839
we need to close out 1:30 above 845 I believe to maybe stop the selling here
trying to revsrse… 844….
If we close out 1:30 EST above 845 or so, maybe even 844… i think they will try and make this the low of the day…
next 5 mins may tell the story here…. I think we may need to reverse here… the daily trend appear broken… or close
long, hard stop at the low, IMO…. 845 clears, we should see 860 again i dooo believe..
845 clears we should see a pretty decent move higher here….
trend suggests we should not exceed 842 here if this low will hold
842… ok… it should reverse in here… if this low is going to hold in my humble opinion… if this low does not hold… im not sure what will happen… but it clearly would not be good
844,,, going as planned, thus far
hmmm back down to 841…. we HAVE to clear 845
840 … this low needs to hold I believe…. but close day on very low volume….the close is ALL that matters
low cleared… NOT good
im guessing this is going straight down now… we couldnt get over 845 as I said we had to do… shorts may tear this down now
what in the world… I am beginning to think its meee…lol. BigCharts changed againnnnn…I am very confused by this… whatever
no idea why there is even one buyer here… but what do I know
836.29 thus far…. very unlikely thats the low, IMO
this clearly does not look good… I cannot imagine they are going to plunge thios thing on low volume though… maybe, seems unlikely
Keep in mind there should be “blind” buyers above 818…. as i have mentioned… the question is when will it try and hold that and put in a decent low above it… today or tomorrow…
it popped back to 840 and change… why, I have no idea… it appears to me the odds we have seen the low is very slim here
ok, new low… here is the problem as i see things… the hourly traders will want this over 850 at 2:00…. seems very unlikely at this point… they dont HAVE to get on board though,,, but would get more believers
new lows… 834
833
832
why anyone was long once 839 cleared… I have no idea… long term traders maybe…
anyhow…. im going to go run errands… we need a FIRM low here i believe….close day… expect possible volatilty late….closing at the high or low of the day appears possible here
Looking back on the market after the close, kinda odd… never made a firm low, short covering into the close…. I kinda thought that was possible/likely with “blind buyers above 818….and shorts likely sitting it out…. sooo a low of 826 was pretty predictable