Stocks Drift, Close Flat

The stock market isn't doing all that much this week as of yet. The "outbreak" of swine flu has CNBC busy, yet, investors have yawned at the potential dangers of an epidemic. The Dow opened about 100 points lower today, rallied positive off the open and then traded sideways the rest of the day. I am still looking at the short off the 880 level in the S&P as potentially profitable and, at the very least, offering excellent risk-to-reward.

Looking too micro at stock charts can drive a person insane but some candlestick analysis can give some insight into the market's action. The circled area gives a quick look at the action of the past couple weeks and we can see candlesticks with tails into the 880 area. Over the last 3 days, we have seen stocks bought off lows but the market has been unable to hold rallies dropping into the close. This action results in small bodies with disproportionately large tails to the upside. Granted, this is a very micro look and is less useful given the falling volume.

Tomorrow's advance GDP report may be an important catalyst for market movement. The short continues to be difficult as dips are bought aggressively as expected. I am looking for the market to roll over and put a large red candlestick into the charts through the 830 level possibly triggering tomorrow.