On The Upside
S&Ps are trading significantly higher this morning, up 14.50 points at 1345.
On the upside, we have 1347.50 and above that, yesterday’s target of 1350, then 1351.50, a major at 1353.50, key areas at 1355 and 1359, and a major objective at 1360.50.
On the downside, we have 1342.50, 1341.50, 1338, and a zone between 1333 and 1336.50, which was yesterday’s high.
NASDAQ was trading up 82 handles at 2640. The first area of resistance will be 2680 to 2700. 2683 was Friday’s intraday high. Above 2700, we have a critical zone between 2720 and 2740.
If we can close above this zone on an hourly basis, look for 2800. We think that 2800 would cap the upside today; that would be a rally of 240 handles — or nearly 10%.
On the downside, support is between 2605 and 2595. Under that, 2570 to 2555. This area will fill the gap.
More importantly, this is where we traded heavily yesterday afternoon. The market could not take out the 2555-level. We consider this zone to be absolutely critical support.
If we fail here, look for a move to 2470. We have support along the way between 2520 and 2510, then 2490 to 2485. Below 2470 is our limit down, which was 2462.50. We would expect some support in here.
If this fails, 2436 is the contract low, and we would most likely be on our way to 2400 in a very emotional reversal trade.
For the Dow, 10,650 is the critical area of resistance. We should open above this level. If we can close above it, it targets a move back to 10,800. If we fail to close above it, we’ll most likely stay defined in this range between 10,600 and 10,300.