After the Smoke Clears

All in all, the equity markets had a tempered response yesterday to a small rate cut of only 25 bp, thanks to the indication that the Fed would cut more if necessary.

This morning, S&Ps are up 8.80 at 1227.80. For today, on the upside we have 1229.50, 1231.50, 1235.50, 1238, 1242.50, 1246.50 and 1249.50. On the downside, we have a key area at 1225 where we have seen a lot of trading activity over the past two weeks. Below this, we have 1223, 1220, 1216.50, 1215.50, and yesterday’s low of 1214.

NASDAQ is trading at 1804, up 32 handles. For the NASDAQ today, if we open here, we’ll be around the key gap area of 1806. We’re going to call the zone between 1795 and 1810 neutral. Above this, 1850 becomes the target. The first stop should be light resistance between 1820 and 1825, followed by large resistance between 1837 and 1845.

Below our neutral zone, expect support to come in between 1788 and 1780. If we get below this, it targets a move to 1750. Along the way, we have a neutral/support zone between 1770 and 1760.

The Dow had another settlement below 10,500. This was our low settlement since early April. There is no question that the market needs to make some headway here to the upside.