Friday, August 17, 2007

Dow Down 15

Very brief post tonight. S&P futures down 5 as yen carry trade unwinds at a quicker pace. That and a near shut down of the commercial paper market, along with expiration will make for interesting trading on Friday.

The rebound from a 340 point deficit was pretty amazing stuff, but way too convenient for the Dow and other indexes to hit the 10% official correction levels and then rally like a bat out of hell. You sure can expect a retest of the day's lows at some point, but given the very oversold condition of the market, you can't rule out a stronger snap back soon, which would merely inflict more pain and gnashing of teeth if we then retest the lows of today. When has this market not been retesting lows after snap backs recently? Plus, following days of decline, I would imagine specialists are loaded to the gills with inventory and no doubt want to off some of it to the slow learner "buy on the dip crowd".

I'd guess S&P 1430 would be a resistance area to the upside in bounce back scenario and 1375 would be support to the downside.

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