Wednesday, April 6, 2011

Gap Up Open Right on Schedule

Yesterday I wrote

While the small and mid caps have already moved forward to new highs everyone is simply waiting for the S&P 500 to break through the old February highs in the mid 1340s so we can continue the song and dance.  I would not be surprised to see this happen via a gap up open, sooner rather than later.

And this morning, we have a large move up in futures for no apparent reason other than it's been a few sessions since we've had one.  Sorry to be cynical about it, but anyone watching this market the past few years can see anytime we struggle with a technical level, the "urgent buyer" (someone who apparently does not care what price 'he' pays, but is happy to drive the entire market up in the overnight session usually for no good reason) comes in, and off to the races we go.

Looking back at the February highs, the intraday high was 1344 on the 18th, with the closing high at 1343 so I'd expect the premarket surge to take us right near those levels.  After most of the dirty work is done in the overnight session, we often see either flat or downward moves during the actual regular hours, so we'll see how today goes.  This is definitely the pivot point of the week as I outlined Monday - and with little in the way of economic news, we'll continue to trade on technicals until earning season comes upon us.

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