A Good Performance
S&Ps staged a pretty good performance yesterday, with a strong settle about 1.00 points above fair value. The market participated in an 18.00-point range yesterday, with a high of 1337.80 and a low of 1319.60. We still feel that 1366.50 is a legitimate target for the end of the week.
We have resistance between 1337.50 and 1341. If we get above 1341, look for a move to 1346. We have resistance between 1345 and 1347.50. If we can close above this resistance zone on an hourly basis, it should bode very well for the remainder of today’s session and into the rest of the week.
Above this zone, our next target becomes 1354. We have resistance between 1353 and 1355. Any trade above this zone, should clear the way for a run to 1366.50. We have support today between 1330 and 1327.50. Any move below this, look for a move to 1322. We have support between 1322 and 1318.
If the market moves below 1318, we do not expect a “freefall,” rather we would expect more grinding to the downside that should not take us below 1306. There is an important support zone between 1313 to 1310. Again any settlement below 1306 is a negative, and will negate our 1366.50 target.
NASDAQ (NDH) is trading down 21 handles at 2456, after going on a pretty wild ride yesterday. We made a 2519 high within the first 20 minutes of trading, and by lunchtime to early afternoon it made the low of the day at 2374, which was just above the limit down price.
The market was then able to turn around and stage a final-hour rally, and close much closer to the high of the day and actually up on the session at 2477.50. At that level, the market was trading about 30 points over fair value.
One area of note yesterday — and one that should be watched closely today — was the Semi-Conductor Index (SOX). We trended in line with the SOX throughout the session. Also worth keeping an eye on is the BBH (Biotech Holders Trust).
For today, between 2505 and 2520 will be what decides this market’s fate. Above 2520 we are looking for 2570. We have resistance between 2565 and 2580. If we get above this level, there is a chance to get above 2620. However we do not think that will occur today. We have good resistance between 2600 and 2625. Any settlement in the 2500s is bullish. Any settlment above 2530 is very bullish and should lead to our target of 2650 by the end of the week.
On the downside, the first key area is 2440-2425. If this fails, there is a good chance we’ll trade down to yesterday’s low at 2374. We have small support between 2405 and 2390. Below 2390, look for 2370.
However, we have limit down at 2382.50 and this may be the target price instead of 2370. If we do trade limit and we fail to bounce, there is a chance we have seen the highs for this move. This will most likely come true if we settle below 2405.
The Dow is getting up toward the top end of our target range of 10,800. We settled yesterday at 10,692. We expect more of the same today: We have support between 10,550 and 10,500, and resistance between 10,750 and 10,850.