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Stock Market Opening Report - May 10 2012

 May 10, 2012 09:24 AM

(By Rich Bieglmeier) Wednesday was nearly a carbon copy of Tuesday. Stocks got beat up like Shane Mosley in the morning and fought back like Money Mayweather in the afternoon. However, when the final bell rang, bulls were on the wrong side of the decision as stocks finished in the red.

For the second day in a row, the NASDAQ pulled a U-turn at 2900 and rallied back to 2950ish before settling back. What we got here is a good old-fashion technical dual between 2950 and 2900. Sooner than later, one side or the other will fall. Whichever way it breaks is the way stocks will head immediately afterwards.  We are rooting for 2950 to break before 2900.

Ben Bernanke's speech and Thursday's Jobless claim are likely to be the deciding factors. iStock is positive that Ben will do his best to talk to the Wall Street algorithms and give them the headlines they need to buy. Hint, hint, more digital money is coming.

[Related -Tackling China's Debt Problem: Can Debt-Equity Conversions Help?]

Jobless Claims are forecast to come in at 366,000, it would be nice to get a result in the 355 range – fingers crossed! A figure up around 385 would be dangerous and could threaten 2900.

It's counter-intuitive, but the more attempts the indexes make at piercing support/resistance levels, the weaker the barriers become. Here's to the Fed Chair and Jobless claims putting pressure on 2950.

And that's all you need to watch in the next couple of days, 2900 or 2950, which dies first?


[Related -Will Job Growth Kill The Bear-Market Signal For Stocks?]


Thursday's Technical term of the Day:

True Range: The true range is measured by the greatest of:

Today's high less Today's low.

Today's high minus yesterday's close.

Today's low minus yesterday's close.

True range is used to measure volatility in a stock or index; the higher the range, the more volatile. Many times, the true range for stocks or the indexes will expand right before big moves up or down.

Imagine for a moment why that is. It's a tug-of-war between buyers and sellers. As bears pull a stock down, bulls fight back and pull the stock higher. Each attempts to scare off the other by becoming more aggressive than in the previous battle. Eventually, whichever side has more strength and weight wins, and the stock or index will move with the winner. More buyers than sellers = up, and more sellers than buyers = down.



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