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  • Bears Slam Support, Futures Up 0 comments
    Oct 9, 2013 1:30 PM

    Bears Slam Support, Futures Up

    9:00am (EST)

    The zombies took the bulls by the horn and drove the market in the dirt following another day of back-and-forth drama. The petty politics ended with a continued government shutdown and no signs of negotiations any time soon.

    The bears took advantage of another day of drama and a frustrated Wall Street to push new lows. The bulls did a good job of holding lower levels of support but another straw on their back could break them.

    The Dow declined 160 points, or 1.8%, to close at 14,776. The blue-chips spent the majority of the session in the red after trying to hold positive territory on the open. The 2-point pop to 14,938 was quickly followed by selling pressure down to 14,773 into the close. The close below 14,800 gets 14,600 in the mix and from there 14,450. A close back above 15,000 would be bullish but 14,800 needs to clear, first.

    The S&P 500 tanked 20 points, or 1.2%, to settle at 1,655. The index made a slight trip into positive territory by a point after the open but stayed in a steady decline to finish at its lows. The inability by the bulls to hold 1,675 was an opportunity for the bears to push 1,650. We have said a close below this level could quickly lead to 1,625-1,600 while a continued close above 1,675 keeps 1,700 in play.

    The Nasdaq dropped 75 points, or 2%, to finish at 3,694. We have talked about Tech's struggle at 3,775 and after a 2-point trip to 3,772 it was all downhill from there. The close below 3,700 was not pretty and brings 3,650-3,600 into the picture. Resistance is at 3,725-3,750.

    The Russell 2000 fell 18 points, or 1.7%, to end at 1,047. The small-caps traded up to 1,067 on the open but also folded like a cheap lawn chair after failing to hold 1,060 and closing just below 1,050. A drop below 1,040 would be very bearish and could lead to 1,025-1,000 on continued weakness.

    The S&P 500 Volatility Index ($VIX, 20.34, up 0.93) cleared 20 after reaching a peak of 21.01. We said to buckle-up if the bears cleared 17.50 this week as 22 could come into play on a close above 20. We also add that the VIX could trade to 30 if this level is blown out while a close back below 17.50 would signal a deal is near.

    We had a very busy Tuesday as we closed out 5 more trades for a 4-1 record. We had 3 winning trades for our Weekly Wrap that gets our Track Record to 37-3 for 2013 and 81-5 since we started the portfolio.

    As we head to press, futures look like this: Dow (+25); S&P 500 (+4); Nasdaq (+9).

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