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Last week, we warned about key support at 1080-85. That failed the next day, and the thought process is we could see a further correction to 1038.
The playbook calls for a vigorous attempt to get back over that support line — and then fail. So its no surprise that futures are up strong today.
We know that forecasting is folly, and the shorter the time line, the more random the market action is. However, if I were a gambling man, the bet I would make is for a rally right back to that break line, followed by a move lower.
Of course, this technical stuff — support and resistance lines — is just voodoo to some of you. But its how many Wall Street traders manage their risk profile and adjust to what is otherwise random noise. YMMV.
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