Good morning, everyone, and greetings from pitch-black Palo Alto. Another two-thirds of a million Americans were reported as having lost their jobs, and in a desperate move for good news, MarketWatch headlines this as being "not as bad as feared," much like the poor student whose mother breathes a sigh of relief when he brings home a C- on his report card.
The /ES briefly popped higher on the news (what with it being not as bad as feared and all) and then lost those gains, only to sink lower. So I guess the risk of some amazing jobs reporting sending the market 700 points higher today is behind us. Instead, I offer this rather tall chart.
I used to be as obsessed with the Russell as I am with the /ES now, but my interest in the Russell has rekindled recently. Anyway, the point to make on this chart is much the same as I am making on other major index charts – – there's a lot of muck above current price levels bulls are going to have to conquer. This overhead supply is, presently, the bear's best friend.
One interesting thing I noted is this: the measured target from the head and shoulders pattern (the rounded rectangle, encompassing a pattern so beautiful it brings tears to my eyes) was about 450 which, err, it achieved nicely. It fell well past that, and now it has recovered to the same level. So the target for this pattern has morphed itself into a resistance level now.
I don't relish us beating around these levels for months on end. I'd rather jump in the time machine and find us much higher so I can buy puts like a Banshee (wait a second, they were the screamers, weren't they? Perhaps they bought puts too.) But we work with what we have. Good luck out there.
