By Mike Paulenoff, MPTrader.com (www.mptrader.com)
If you're a trader you might be a little bored today. Since yesterday's high in the early am, the indices have gone basically sideways. That's to be expected after such a big upmove. In the preceding seven sessions on the S&P 500 and six of seven on the Nasdaq, you had a near vertical up-move in those indices. The most recent pivot is a week ago Tuesday at about 1000-1004 in the S&P 500, from where we went all the way up to yesterday's high at nearly 1030.
Traders are awaiting tomorrow's (Friday's) monthly employment report for August. Most people think that's the biggest economic data series for the month, and since the employment situation seems to be on everybody's mind as it relates to whether the economy is actually expanding or whether it will continue to have a jobless expansion, it's no wonder to me that the markets are so quiet ahead of the release of the data tomorrow morning at 8:30 EST.
In spite of the 6-7 up-days in a row in the indices, we're basically trading within a few ticks of the high. This leads me to believe there are still no sellers around, and unless the holders of long positions have a reason to liquidate their long positions -- i.e., very bad employment numbers tomorrow -- the buyers and holders of long positions will continue to hold, and the sellers will back away like they've done for the entire summer basically.
So, it is a very boring day in general. However, from a larger perspective it's a very constructive, because the markets after 6-7 up-days have not given back hardly any of the gains.
For more of Mike Paulenoff, sign up for a FREE 30-Day Trial to his E-Mini/Index Futures diary.