A Key Week
What happens this week will play a large part in what happens the rest of the year. In general, what we saw Friday morning was certainly a move by money managers out of cash and into stocks. By the afternoon, some of that buying had dried up. Nevertheless, the buying characteristics of the last two sessions have been quite strong.
For today, S&Ps were trading down 500 at 1406 this morning. On the upside, our targets are 1408, 1412.50, 1418.50, 1420.50 and 1422, which was Friday’s high. On the downside, we see 1401.50, 1400.50 1398, and 1394.50. The area between 1405 and 1408 is key.
The NASDAQ was called to open 50 lower at 3449.50. In the last two sessions we’ve moved more than 10% to the upside, so it would not surprise us to see a little bit of a pullback. One disappointing note on Friday was late-session selling in some of the large caps as Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating) finished nearly $3 off its high.
For today, we have resistance between 3478 and 3490, then 3515 up to 3526. If we get above 3526, look for the market to try to test Friday’s high at 3558. We have resistance between 3550 and 3561. If we get above this zone, it clears the way for a move to 3620. Along the way, 3590-3595 is resistance.
We have support between 3438 and 3430, then 3410 to 3395. This level would also be where the limit down would occur, at 3404.50. If we get consistent trading under this support zone, we could dip as low as 3320. Along the way, there is support between 3360 and 3350.
The Dow has retraced much of its down move and actually finished slightly higher on the week. From this level, 10,300 is the first resistance area. Essentially, we’re looking for this market to try to base before making a move in one direction.
Do you have a follow-up question about something in this column or other questions about trading stocks, futures, options or funds? Let our expert contributors provide answers in the TradingMarkets Question & Answer section! E-mail your question to questions@tradingmarkets.com.
For the latest answers to subscriber questions, check out the Q&A section, linked at the bottom-right section of the TradingMarkets.com home page.