Analysis:
Yesterday's Analysis predicted that "a negatively surprising [ISM] reading tomorrow will further reinforce 1,150 as the near-term market top." Today the market opened higher to push towards 1,150, but the slightly disappointing ISM manufacturing index put a top to the market's advance at 1,150. Looking ahead to next week, no economic news is likely to be so upbeat as to catapult the market above 1,150, and given the market's expectation, any disappointing news will bring the market back to the summer trading range below 1,131. In all likelihood, the market will attempt to stay below 1,131 before rallying from a point below 1,131 to soar above 1,150.
Strategy:
Hold short at 1,122
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