Wednesday's auction, while challenging for those who got long above 2105, was actually pretty benign. The biggest losers on the day where the SPDR S&P 500 ETF (SPY) and SPDR Dow Jones Industrial Average ETF (DIA), both of which declined around 0.25%, hardly earth-shattering.
The iShares Russell 2000 (IWM) and PowerShares QQQ Trust (QQQ) finished the day near the flatline. (IShares Russell 2000 is part of TheStreet's Growth Seeker portfolio.)
At most, perhaps we can say small-caps are continuing to reduce their horrendous performance gap with larger-cap names. Beyond that, though, the session was inconsequential.
There were obviously a handful of big winners and losers during the session. Names like U.S. Steel (X), Mosaic (MOS), Time Warner (TMX) and a number of other media stocks took it on the chin, while stocks like Tesla Motors (TSLA), Michael Kors Holdings (KORS) and Netflix (NFLX) did quite well. In the end though, and viewing the market via sectors, we see very little outsized action. Again, Wednesday's trading was primarily about listening to Fed Chair Janet Yellen and counting down the hours until Friday's nonfarm payroll data is released.
As we prepare for Thursday's E-Mini S&P 500 futures (Es), let's continue to remember that all major indices are still trading above their short and intermediate time-frame moving averages. However, similar to my comments in Wednesday's Trader Daily, I continue to believe buyers are growing weary. A weary buyer invites the aggressive trader to fade attempts to push value higher.
With that in mind, as long as price remains in a short-term bull trend, any short selling should be reserved for responsive (fading strength) rather than initiative (selling breakdowns) opportunities. I'll continue to look for reasons to respond to high prices with short sales, rather than chasing bullish price momentum with additional buy orders.
Our primary area of interest at Thursday's open is expected to be 2088.25 to 2089.25. If responsive buyers are going to make a stand ahead of Friday's payroll data, a logical area for them to do so would be just beneath Tuesday and Wednesday's 2090.50 regular-session intraday low. As long as buyers respond to prices advertised in and around that one-handle area, day time-frame scalpers should prepare for rotation back toward the big figure (2100).
All trading above 2100 puts 2105.25 back on the table, but that's also where we should expect supply to thicken in a meaningful way. In a nutshell, we are looking for responsive activity toward both 2088.25 (buy side) and 2105.25 (sell side).
A sustained trade beneath 2088.25 opens the door to a more aggressive seller, and this time we'd be looking past 2081.75 and 2076, and potentially as low as 2070.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at firstname.lastname@example.org or posted to my Twitter feed @ByrneRWS