Your MUST-READ Morning Stock Futures Cheat Sheet: Two Scenarios

The exclusive Markets Morning Report is supplied by The Precision Report.

The Precise Take – Two Scenarios

Big Picture Analysis:  Both yesterday and overnight, the major US indexes made lower lows, with the Dow 30 undercutting its August 9th low.  Though there is not yet price confirmation, we must entertain the possibility of a near-term bottom fueled by overly bearish sentiment.  In that regard, will highlight the findings of Wayne Whaley’s excellent statistical analysis (prepared daily and free, we might add):

http://library.constantcontact.com/download/get/file/1104076872181-44/Was+That+a+Retest.pdf

However, given the scope of the fundamental problems brewing, with the fate of BAC and one or more PIIGS at stake, we can also envision a scenario where extreme bearish sentiment is justified (i.e., Lehman redux).  If the former scenario, we would want to see price bottom by month-end and with a low not materially lower than the 1072 combined session low in the Dec 2011 ES contract (allowing for a brief undercut).

Trading Today:   Below are marked the support and resistance areas.  Scheduled news is light today, but headline risk remains strong.

Today’s  Scheduled News (all times EDT)

Major Market Movers
None

Minor Market Movers
William Dudley speaks at 1:30 pm

Tomorrow’s Scheduled News

Major Market Movers
New Homes Sales at 10:00 am

Minor Market Movers
None


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