because the market is too high & overbought but it still wants to go even higher
Possible trades are to sell S&P 500 @ 1685 & 1690 but not recommended
S&P 500 did stay below 1685 for a long time, but just barely below & sometimes even slightly breaking above
So it wasn't quite safe to trade
S&P 500 also broke above 1690 when debt limit was supposedly raised, but dropped below 1690 & closing above it
Therefore 1690 should be watched closely as it can either become a strong support or resistance today
Resistance is preferred as the market is overbought
S&P 500 jumped 36.16 points in 1 day, which is too much for a day
Understanding the market
The force driving the market yesterday was "Hope"
Hopeful that the debt limit problem will be resolved, hopeful that the US government will reopen,
which unfortunately made the market go up higher than it actually should
The reality is debt limit has not even been temporarily raised & US government is still in shutdown
On a positive note, yesterday's market reaction might put more pressure on lawmakers to agree on a debt limit raise today
US Treasury Secretary & Fed Chairman assured their G20 counterparts that a US debt resolution will be reached in time
There's also a lot of potential positive news today, but high hopes might lead to huge disappointments
We would prefer a pullback to 1680 or below & slowly building supports before reaching 1700
However, if the market continues to be bullish, it might try to create support @ 1690 & target 1700 today
What to watch for the stock market today (11 October 2013)
Stock market might be mixed today without unemployment rate data as guidance, which should be worse anyway, consumer sentiment should also be worse than previous because of the shutdown
2 of US largest banks, JPMorgan & Wells Fargo will report their earnings today, which will become a strong market catalyst & might determine the market's direction for the day
G20 & International Monetary Fund meetings all day
Political news will continue to have impact on the market throughout the day
Everyone is waiting for a debt limit deal that might happen as soon as today
Markets often have higher volatility on Fridays & traders might also take profit or buy even more especially at the end of the day
Trade cautiously & avoid trading near end of day
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