Resistance Up Ahead
S&Ps were trading up 1300 at 1359.60 this morning and face a big resistance area between 1361.50 and 1365. If this were to be exceeded, it targets a move to 1377. We have another big resistance zone between 1373 and 1378.
We expect the market to have much difficulty getting through the 1361.50-1365 level. Consider that we are now 3600 higher than Wednesday’s settlement. In other words, in a half-day and a night of trading, we’ve moved 3600 higher.
We have support between 1353.80 and 1348.50. Under that, look for a move to 1340. We have resistance between 1342.50 and 1338. Basically, things to keep your eye on today are: Can the tech sector continue its rebound? Was this rally just a news-related event due to vote certification?
Basically, we think we’re in a range between 1378 and 1320. Whichever way we break out of this range on a settlement basis is going to be the key moving forward. On busy days we may trade in 60%-70% of that range. But the key will be the settlement.
NASDAQ was trading up 78 handles 2907. Pretty light volume. Friday’s rally of nearly 5% was definitely impressive, yet the market lost 4% on the week. The key today will be, can we follow Friday’s rally?
The semiconductors will be critical; they posted nearly a 9% gain in the SOX in Friday’s half-session. Also, the second-tiers will be essential.
We have resistance between 2920 and 2945. If the market gets above this level, look for a move to 3010. We have resistance between 3000 and 3015. Any settlement above 2950 is bullish in the short-term and could spark a continued rally over the next few sessions.
Our first support level is between 2858 and 2845. Under that, look for 2800 to trade. We have support between 2810 and 2790. If this were to fail, 2720 is the next target on the downside. We have some support between 2755 and 2740.
Any settlement under 2800 is a negative. We think this market is in a range between 3050 and 2700.
If we have a broadening of the tech rally, do not expect the Dow to go along as strongly. But do expect it to trade higher. The key in the Dow is between 10,650 and 10,350. We think that’s our range right now.
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