Today was a second consolidation day in two. If you look at the 60-min. charts on the market watch 4 (SPY, DIA, QQQ, and IWM), you'll see a clear pattern of sideways action since the gap down Monday morning.
All four markets also closed in the upper part of their range and all but the Q's closed over the prior day's high. This creates a situation where they may all open above their pivots which are positively stacked and above Monday's high. Both of these levels will be areas to look for OR Reversals.
The consolidation day also means the markets have held the support area of the 20-day MA's. The IWM's managed to get back above their 10-day MA which is still positively sloped. The QQQ is the weakest relative to its 10 and 20-day MA but it is also sitting right on top of the 200 and much stronger on a longer term basis.
After two days of consolidation a trend day is very possible. News out of Europe remains the wild card. With a modest amount of optimism the pivot set up at support could lead to a nice up day. Any bad news, however, and the consolidation could create a big trend day down. Absent any news I would play reversals or quick 5-min breakouts in the direction of the stock's major trend so your are positioned to take advantage of either chop or a trend day.
Long Side
BIDU
CVI
IBM
BBBY
GPC
Reversals
NFLX
NIHD
ORLY
LVS
RRC
TIF
VLO
COG
TSCO
Over R1
LULU
YUM
COH
QCOR
CTXS
Short Side
LEA
GMCR
Must break S1
VAR
VMED
WLT
COF
C
PNC
