Yesterday started out as a barn burner but ended a bit like a gap and crap, as we affectionately label such behavior. Traders partially (but nearly completely) filled the gap above us. But we still have yesterday’s gap higher below us, and we know all gaps like to be eventually filled.
Globex sellers explored the gap below us overnight at least down to 4382.25, then retested the level after the monthly payroll report this morning. In neither case were our Globex selling cousins able to get much footing. That puts a checkmark in the bullish column this morning. Opening above 4400 counts in the bullish column as well.
Today’s story will mostly be about whether we can stay in yesterday’s range above the gap and the ONL at 4382.25 or not. I am bullish above the ONL, less bullish below it, and running for the hills below yesterday’s gap bottom at 4355.75.
I don’t trade on Friday but will take a peek at the close to determine whether to hold our 10% position in SPY calls or add to it. I don’t see anything else to give us much of a clue about the open. It might be better to let the tape settle in before committing to anything.
A.F. Thornton