The Precise Take – Bulls fading quickly into the weekend, looking for a “surprise” to reignite

International Trade and Import/Export Prices released at 8:30 am have not moved the markets much and we only have Consumer Sentiment at 9:55 am and Geithner speaking at 10:00 am in terms of scheduled news.  See page 2 for an analysis of yesterday’s Federal Reserve Bank of New York’s permanent open market operations (POMO) along with yesterday’s actual time profile and today’s potential time profile.

We are bearish and don’t become bullish unless and until the ES can get over the daily gap/pivot area at 875.75 to 879.25.  Though 854.75 is our next downside target, the daily S3’s as calculated on the day-session-only and day+overnight sessions come in at 857.58 to 858.75 and we would look to take short profits there.  If the ES gets below the 854.75 level (unlikely), we would look for other short entries.  It is now looking like the ES will have to wait until next week to complete its up-probe in the head and shoulders pattern, and we are now only looking for …

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