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Minyanville's T3 Morning Market Call: Futures Indicate Higher Open to Kick Off Q4


Tech did get a hit a bit harder than some of other sectors, which is a bit of red flag.

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Futures have a positive tone to kick off the fourth quarter. There are lots of question marks going into this quarter as indices are having a nice year so far. The S&P is up 15%+ and the Nasdaq is up 18%+. Some market participants enjoyed this move and some have fought this move, so everyone will be approaching the next three months differently. Some will be protecting, and some will be sweating that they might have to play some catch up.

The theme remains the same: Global slowdown vs. central planning and stimulus!

Recently, the action has been a bit sloppy and choppy. September 14 marked the high of the year as we peaked at 1474. On the same day, most oscillators hit extreme overbought readings. Since then, we've had a very "choppy" environment as the S&P lost some momentum when we broke 1449 and then put in a small pivot low around 1430 Wednesday. Markets are trying to build a bit of floor above this level as the 21-day played some catch up. Will this be the pivot low to accumulate stock around for a move back to highs of the year, or will we see more of a pullback? Tactical traders will be trying to figure that out, but macro investors don't have much to worry about.

Lately you've had to sell strength and buy weakness, as momentum has been hard to find. Today should be interesting. Typically new funds come in to start a new quarter, so seeing if we build on this open or if it gets sold could answer some questions about whether 1430 sticks or we need to do a bit more downside probing.

S&P resistance stands at 1447-1450, which is a pretty important spot to watch for short-term direction. Bears need to try and defend this level to keep some pressure on. If bulls reclaim this area with volume and force, this will set us in motion for a move back to the highs of the year.

If they sell today's open, 1430 is important support, then 1422-1426, with the 50-day moving average at 1412.

Tech did get a hit a bit harder than some of other sectors, which is a bit of red flag, but the QQQ is still over the 50-day moving average. QQQ back above $69.50-69.75 will make the bulls feel a bit better. The semiconductors ETF (NYSEARCA:XSD) continues to be a major laggard.
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Scott Redler is flat.
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