As usual, even a significantly missed claims number means nothing in this one way market. I will say this, when this house of cards comes down it is going to make 2008 look like a minor short trend. The big picture is mixed, but big lot traders continue to favor the long side. There is only one more rung up though until we start entering an area of grinding from 2008. In other words, out of the free fall selling tails. If we do break new highs today or whenever, we shouldn’t see any big leaps past the 1210 handle and should grind all the way to 18. See the second 2008 price detail post this morning. I do think the high side is a bit more solid than the low side despite all this since we failed to make new highs ON and 7.50 is also a major 2008 rejection area. I will at least look to scalp fade into the 6.50 handle, but probably not past there. If it breaks I might get long on strong orders but come out ahead of 10.50. 5.75/6.00 is a great scalp short area as well if it doesn’t get hit pre-market. It only traded a hair over 20 cars long overnight. In fact, we may even finally stall there and start rotating down for the day depending on how the cash perceives the gap down and the claims number. Also we have industrial production at 9:15 to watch, but I doubt it will matter. 2.50 is another key area to watch for a long trade and of course the OL is really key. Watch out trying to take a fade of the OL too far though as there is only a very small balance area above it before that 2.50 rejection area which may hold from either side. If I got long at the OL I would come out with just 3-4 ticks probably. Finally, if we fall under I will wait to sell around 1200 into 99 or maybe 98.
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