Will Lehman lead the way?

What a day. The market opened with an enormous gap higher after a very poor outing the prior session. However,the gains did not last long as the market moved steadily lower throughout the day, that is until the last half hour of trading when the bulls managed to rally the market higher.

The key level to watch remains the 1490 area on the S&P. Overhead resistance could pose a threat to the bulls. If the market moves lower I would watch the 1460 level of the S&P. This area could act as decent support. If that doesn’t hold I think we are back where we began the December expiration cycle at the 1440 level.

With only 6 days left until SPX settles (at the open Friday) the Iron Condor strategy looks to make another 7.9% during this expiration cycle. This would be the fourth consecutive gain since we altered the strategy.

As for tomorrow: 

The Lehman report, due out before the opening bell ,will certainly guide the market direction early in the trading session.

According to the Stock Trader’s Almanac Friday is bearish in the S&P with only 38.1% of the trading days closing higher.

Notes of Interest

• Sound Familiar ETF Subscriber’s – “As for putting money to work on the long side, wake me up when we’re back to extreme oversold conditions again. I don’t plan one single buy until that point is reached. Such a tactic allowed me to survive and thrive in the past and I’m confident the same will hold true now. We will see better days, but this is not the time for hope and faith that all is well. The market is sending us a message – are you listening?” – Charles Kirk
• As always Bespoke gives us the goods.
• The VIX:VXN Ratio – Vix and More