Consolidation
S&Ps are in a consolidation mode, and if we break out to the upside, we may make a move toward Friday’s high of 1076.
This morning, S&Ps are trading down 1 point at 1058.50. On the upside, we essentially have a neutral zone between 1059 and 1063. Above 1063, look for a quick move to the 1066-67 area. Above this zone, we think the market will make a move for Friday’s high of 1076, and essentially break out of this very tight consolidation range that we are in.
On the downside, from 1060 down to our lows from Friday of 1055.50, the market seems to be building up some strong support. Below this, we are targeting 1050 on the downside. We think 1050 will be support, and that support will stretch down to 1048.80.
Nasdaq is trading down 5.50 at 1249. On the upside, we have resistance between 1254 and 1256. Above this, we’re looking for 1270. Along the way, 1263-65 is resistance. If we get above 1270, especially if we are trading there after the first hour, we would again look for this market to probe the upside — eventually trying to trade toward the 1287 level.
On the downside, we have an area of support between 1251 and 1244. Below this, we have a key level of 1240. The first stop below 1240 should be 1232. We have support between 1233 and 1230.
As for the Dow, once again this market was able to hold above 9000. Again, this has not been a tech-driven rally, nor does it appear as though that will change any time soon.