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Keene Little : 10/21/2007 10:33:26 PM

Monday's pivot tables: Link and Link

First thing to note this evening is that equity futures are down hard. Right away that's going to scare a lot of people who will remember that Black Monday, October 19, 1987 followed a down opex Friday. That Monday started with equity futures down hard so naturally this is going to spook the market if futures stay down come Monday's open.

The risk of course, for the bulls, is that the market could sell off as hard as it did in 1987. But the risk for bears is that there will be too many leaning to the short side on Monday morning. It wouldn't take much of a concerted effort by the major investment houses, with a little help/prodding from the Fed and Treasury, to suddenly jam the market with massive buy programs to completely reverse the market and get the shorts to start covering en masse.

Needless to say it could be risky for both sides so watch out for the initial volatility. Gunslingers can try to trade it but everyone else should sit on the sidelines and watch the show. I want to see what the pattern looks like for the bounces before chasing it lower. These are the daily charts of the 4 indices I included in this weekend's Wrap so that we can watch the key levels for the bullish and bearish scenarios:
DOW: Link
SPX: Link
NDX: Link
RUT: Link

OI Technical Staff : 10/21/2007 9:59:59 PM

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