Anything Goes
On this first day of the new trading year, we think that today has the possibility to do just about anything. We would expect volume to be heavy and volatility to be pretty strong.
This morning, S&Ps were trading down 1.00 points at 1334. Keep in mind the fair value settlement procedures on Friday. The last trade in the Pit was actually recorded at 1327.
For today, we have a big area between 1338.50 and 1341.50. If the market can get above this, there is a chance for 1350. We have resistance between 1348 and 1351. If this zone is taken out, there is a very good chance that we will clear last week’s high of 1356, and we would expect a move toward the 1362 area — most likely a challenge of the recent 1366.50 high.
On the downside, we have support between 1329 and 1325. If this is taken out, look for a very quick drop to 1315. There is some light support between 1321 and 1319. Then we have some stronger support between 1312 and 1310. If we fall through 1315, the odds will increase for a limit-down move, which today would come in at 1303. We do have support in a large band between 1304 and 1297.
As for the NASDAQ, a fitting close to the year on Friday, as the NDH sold off dramatically from its session high. Currently, we are unchanged at 2374.50. We continue to think that this market will come under pressure.
We have support between 2360 and 2345. This will encompass Friday’s low of 2357. Under this, look for a move to 2300. We have support between 2315 and 2295. If we get below that, look for a move to 2250.
We have support between 2264 and 2248. Any trade below that and the December low of 2213 comes into play.
We have resistance between 2390 and 2410. If we get above that, look for a move to 2450. We have resistance between 2445 and 2455. If we get above that, we think the short-term pressure will be off and would expect a rally to ensue.
We think we could trade as high as 2540 at that point. There is a good band of resistance, however, between 2490 and 2540.
The Dow fell off slightly into the close on Friday, but still is the stalwart performer. We continue to be neutral on it after hitting our upside objective last week.
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