Wednesday, April 9, 2008

MP 4/9/08

Traders,

I have a meeting this morning before the opening, so I am unable to complete a market preview this morning. However – here are some quick items to watch out for.

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NEWS


Citi is in talks to sell $12 billion in loans – giving the stock a little pop in the pre-market – we may see financials get a little upside push if the Citi news is absorbed well.

FED is thought to slow down the rate cuts – but this was already predicted in the fed fund futures to only 25bps – note they have little room to cut anyway -
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Futures Pre-Open


They are pretty flat (below FV) – hour and half before the opening – nothing to really get behind – this picture could change going into the opening

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Support / Resistance


INDU 12250 (12500) / 12750 (We are just above that 12500 not a place to get long, but just flat. If it breaks expect a 12250 area.)
NDX 1800 / 1850 (We are still in that upper band of resistance – a few stocks can keep this from dropping too much or can really drive it down – watch the 1800 level a place to get flat with gamma – because me might NOT hold.)

SPX 1300 (1325) / 1375 (We started coming off a pretty quite week at the resistance and could not break through. 1350 is a pivot point and NOT a place to get long – if we break 1325 and 1300 are in the near-term cards.)

RUT 680 / 720 (We started to slide to 700 and that IS a pivot area – if the broader market breaks bellow 700 then we know that money flow is not coming into the market – watch.)

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Conclusion


We have been at the resistance level for almost a week and the VIX has pulled off to the 22 level, last time the VIX was down here and we all thought that things had changed (note end of Feb) the VIX rocketed back to 35 and the market slide hard and fast. This roller coaster is not over yet!

If you hadn’t loaded up on cheap gamma – now is the time because we could easily head back up to 30-35 range in the VIX.

EXPECT MORE VOLATILITY.

SIDE NOTE: I may have an interesting story to tell tomorrow – regarding the meeting I am going to this morning – we will see – please cross your fingers for me!

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