The S&P 500 has pulled back to the middle of its 1085-1115 trading range. This key index is directionless. While I am somewhat encouraged by recent relative strength in the Russell 2000 I am concerned by the bearish-wedge shape pattern developing on the NASDAQ composite. Now hopefully the better than expected earnings reports from Oracle (ORCL) and Research In Motion (RIMM) will help power the NASDAQ higher on Friday. Yet tomorrow is option expiration Friday and stocks could just hover around their nearest strike price and wait for the closing bell.
While I am cautious here I still think the path of least resistance should be higher. Given the current environment it doesn't make sense to add trades tonight. Let's wait and see how the market closes heading into the weekend.
No new trades tonight. Look for new candidates in the weekend newsletter.
Chart of the NASDAQ Composite: