The Washout Open is Ever Elusive

Despite poor news in both weekly employment claims and global manufacturing, and a sharp drop in futures at 8:30 AM when weekly employment claims were released, the market's "urgent buyer" showed up to get futures back to flat in the ensuing hour.  Hence the washout open I yearn for remains elusive. 

We have ISM Manufacturing in 30 minutes and aside from that not much to go on until tomorrow.  On one hand we are very oversold, and took out a support level everyone was watching yesterday (1040) so a case could be made for "the" oversold rally.  On the other hand still no real panic and most of the generals are still holding in there.  With the positive nature of 'opening days' of the quarter [

?] I have no real feel for the outcome today.  The "easy" trade was that 1040 would be broken as there is no such thing as a quadruple bottom - we got that.  We should view S&P 1040 as our new pivot point but making large directional bets going into tomorrow's employment report is not going to be my cup of tea. 

My thought process is to make my unrealized gains in the SPY puts (a very nice return due to the last hour action yesterday) realized and then simply sit with a portion of my TNA short as a much less aggressive hedge against a small long book.  One could see this market trailing right back up to 1040 very easily in light trading (if ISM makes people happy) since this morning's bad news was ignored.  If ISM is poor maybe we get another round of selling. 

While the intermediate term is negative the S&P 500 is now down nearly 9% in 8 sessions. (after being up 8.2% in 10 days 2 weeks ago - bipolar action as usual)  One would expect a pressure valve to be released at some point soon but from what level?  Any such rally should be sold and shorted in my opinion but the longer we go without any bounce the more risk to bears that arrives (in the very near term).

Repeat of the chart shown a few days ago of potential support areas, we hit the October 2009 support level in premarket (S&P 1020ish)  I would think we would need to retest it in the normal hours - we'll see. 

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