Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Bears Storm Japan's Nikkei

|Includes: DowDuPont Inc. (DWDP)

MomentumOptionsTrading.com Midday Update for 6/13/2013

Bears Storm Japan's Nikkei

12:10pm (EST)

Futures were pointing towards a nasty open on Wall Street this morning when we were doing our late night homework. The news after midnight of Japan's Nikkei dropping a whopping 6% sent shivers through the global markets. When we hit the rack at 2am, Dow futures were down 80 points to 14,898 while the S&P futures were down 10 points to 1,600.

(Nikkei chart)

The bulls were hoping this morning's unemployment report would right the ship but the bears are preparing for a titanic push out of the current trading range. We listed some go targets to possibly buy some index put options this morning for our Watch List but as we have seen 3 previous times this year, the bulls have bounced back just when it appears a selloff is imminent.

Futures had improved dramatically as we went to press this morning and had turned positive ahead of the opening bell after Initial Claims were slightly ahead of expectations at 334,000. Continuing Claims came in at 2.97 million and in-line with forecasts. Retail Sales also came in above expectations at 0.6% versus a forecast for a rise of 0.2%.

The overnight test to the bottom of the trading range limited the damage at the open and the bulls have done well in holding their gains. It will be important for the indexes to at least have a positive close today ahead of Friday's session to break the trend of lower highs and lower lows. A positive close on Friday would also be bullish but let's not put the horse in front of the cart just yet.

As we head to press, the Dow is up double-nickels (55 points) to 15,050 while the S&P 500 is higher by 7 points to 1,620. The Nasdaq is advancing 13 points to 3,413 while the Russell 2000 is gaining 5 points to 977.

The bulls are close to recovering prior support that is now serving as resistance and a big push into the closing bell could get them there. However, if they lose their gains, the bears could get super aggressive.

We have some updates on our current trades so let's go hit the Members Area.