The S&P futures are moving higher in overnight trading. I have stressed yesterdays low of $110.27 was the bottom based on technical signals (until broken). The 500 point drop in the Dow Jones Industrial Average was just inside bar consolidation from Tuesdays late day rally. This huge drop today was a great way to flush out weak hands who bought the rally yesterday. This is classic manipulation that most amateurs would fall into. I continue to believe the lows are in (short term). While the media is spreading fear, smart investors have carefully accumulated some long positions.
Europe is the key play to watch at this point. Around 3am ET European markets will open. Tomorrow morning at 8:30am ET, Jobless Claims will be reported.
Continue to watch the key levels. On the downside, the $112.00 level (where we closed today) and the pivot bottom of $110.27. On the upside, watch the $115.40 level, then the $118.00.
Should the $110.27 level break on the SPY on a CLOSING basis, the market would then break down to $101.50 - $104.50. It is always possible the markets could break down, so while a bottom may be likely, it is not locked in stone. Stay safe.
Should the GLD (gold) open flat to higher and the futures holds their gains, I will most likely take a short. Should I take this short, I will post it in the Hot Charts and Alerts.
Chief Market Strategist