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Subdued Session & A Bit of a Lid on the Market
By Mike Paulenoff, MPTrader.com

Today like yesterday has the feel of a holiday session, as it is within a short week that has a major holiday at the end of it. So in general once again the action is somewhat subdued, but the patterns developed anyway. What we saw today when we came in this morning was some deterioration in prices in the E-mini June S&P and E-mini June Nasdaq off of yesterday's high. In the case of the E-Mini June S&P, 1149.50 was the high, and the market was deteriorating into the 1145 area, and then Nokia (NOK) came out with a disappointing announcement about first quarter growth, or lack thereof, and both indices took a nosedive.

It just so happens that in the E-mini S&P the nosedive has held right around the 1142-43 area, which coincides with the trend off of the March 24 lows which was down in the 1084.75. To the extent that the trendline holds in and around 1143, very little damage will be inflicted on the overall uptrend.

However, should 1142 be broken later this afternoon and we get a move that continues below 1141, that to me will constitute a breakdown of the trendline off the March 24 lows. If that occurs, there should be addition deterioration of price after that, initially to 1138 and then more likely to last Friday's pivot low at 1132, which occurred before the employment numbers.

So right now, number 1 the market is resting after several days to the upside. Number 2 it's leaning against a very important trendline that could be problematic later on. The only thing that would reverse the current deterioration in price would be an upmove later this afternoon or in the last two hours that takes out 1147 on the upside. If that's taken out, then I think we'll retest the highs and maybe make new highs above 1149 ,.

But right now it seems to be subdued action and a bit of a lid on the market at the 1145-46 area.

With regard to the QQQs, the action as a reflection of the Nasdaq is a little more acute on the downside than what we saw in the S&P largely because Nokia impacted the technology sector more directly than it did the S&P. Right now we're at 37.04 off a high yesterday at 37.50. The key level is 36.95-37. If that breaks later today, then I think the Qs will roll over some more and come down into the 36.75-.65 area, and that's the area of the trendline from the March 24 lows.

So right now my work suggests the Qs are still in a correction and still under some pressure, and the pattern argues for more deterioration. Only a move above 37.30 will indicate to me that we've had a correction and the correction is already over, and we're heading back up that 37.50 area.

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