Pre Market TAO Tuesday 7-7-09

With Earnings to begin this week I am not expecting any big moves in the next few days. Asia and Europe are trading relatively flat .5% range . ES futures overnight 898 to 889 and is trading in the high end of yesterday's range. US Dollar is flat to down a bit..Crude is down to flat. 10yr treasuries are flat to up. Today's Spy pivot will be around 8950 with a -+ 100 range .....My plan is to buy 8900 and exit at 9050 with a stop below 8875.

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10:30 et am ....spy looks like it is setting up for a bounce at 8925......the xlp and xlf are moving and holding the top of range while the other xl's testing the bottom of the range....this type of divergence is a wait for the test to complete before you jump in ... there is a line in the sand in this area. watch the xl's in their lower daily range xli/ xlb / xlk for a move to the up side..
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10:45 et am ....took a position at 8910 long with a stop below 8875 ....target is 9025
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11:20 et am......... starting to see positive divergence on 30 min Macd in the lower ranging XL's.
as well as a interday trend break in Spy. Nyse Tick is neutral but with a bearish bias so far.
selling pressure is declining along with the decreasing volume all AM
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11:55 et am .....Teck xlk is testing the May high support / resistance ....this can be Pucker time for this sector.
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12:00 et pm .......with the big interday gap down in the ES futures i elected to close out my long position at 8899.....very small loss....will wait to see if we get another trade opportunity today
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1:42 et pm ....tick and xl's are starting to rebound ..reentered long at 8910
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2:00et pm ........this feels like a market of reluctant buyers rather than aggressive sellers, never the less, it makes for a difficult market to read.
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2:30 et pm.......the spy has been trading below the Vwap (volume weighted moving avg ) all day .
if we don't get a decisive tick to the up side on this next up impulse , spy will probably not get one and after 3:00 pm, the risk will be more to the down side.. any up tick will be my cue to call it a day.....
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3:00 et pm ......closed out long trade at 8905 ....very small loss..... If you're not careful, this market can carve you up like Grand Ma's Christmas Turkey..........In this trading environment, I use half my usual position and will not let my loss get very far from the entry point......
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I was really expecting a final Bull defiance bounce today but they wimped out! With a break and retest of the Institutional Index Xii Head and shoulders lower nick line, I don't see the any more Dip buying in store for me. Sell rally will be the theme from here....
At least until Spy 8200 and the ES Futures 800......