Buy the rumor and sell the news? Two DOW components; GE and Bank of America reported earnings, both beating estimates. The housing starts showed a strong rebound in March from the snow laden numbers of February. Thus all good news, yet the overnight and pre-market have drifted down. The institutional order sizes favored short by 45% overnight and 30% bought the morning on strong volume. The daily trend continues its upward grind on increasing volume. Next resistance areas above the highs are 1212.50 and 1214. Thus we have no clear bias going into this morning. The market is long overdue for some sort of pullback so maybe it’s time for a breather. Be prepared to trade in either direction. Look for fading the strong volume rejection areas and wait for pullbacks if the market decides to trend (more than likely to the downside). Also, there is Consumer sentiment news at 9:55am EST, so be careful with trading around that time.
UPDATE 9:27am EST: the 1202 bounce around 9:20am EST was the 1201.50 fade. That price level may not hold again if price revisits, however price might double bottom providing a second fade opportunity.
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