Pretty much as expected this morning. Claims hit dead center and since it was at least on the lower side of consensus no matter how slight the positive sentiment seems to prevail. Still, the big dog is GDP tomorrow and that hasn’t gone away. XOM earnings are playing big into the mix so make no mistake about that. Basically the whole Dow and the #1 position tracking stock for the worlds biggest hedge funds. The market generally won’t move in the opposite direction of Exxon so that will pull price up today if not prop it up entirely. The market has been showing all the signs of the common sense piecing together of the puzzle. Institutions traded lightly yesterday and basically not at all overnight. They don’t want to take profits on longs if the rally is going to the next rung and they won’t unless the sky falls. With the earnings pouring in on the positive note, the claims at least not worsening, the Euro getting a boost from EU economic outlooks improving, no pressure from the Yen/carry trade, gold flat and oil flattening after yesterday’s sell-off the bias has to be long this morning at least for the time being. That said, in a perfect world we will get some tests to the short side for some no-braining fades but on the other hand the positive sentiment and the chain of levels above make picking short spots pretty tricky this morning. I prefer the high side of the first on closer to the R1 around the 12 handle and the two levels from 18ish to 20ish, again with a favor to the high side for the highest probabilities. We shall see and maybe there will be some of the lower stuff shaking out pre-market which will help move things along.
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