Eyes On Earnings
Today is expected to be a news-dominated day, with all eyes on earnings to be released throughout the day. That could make for a very choppy day of trading.
Earlier this morning, S&Ps had little reaction to the CPI report. A quick low was made at 1518.10, followed by a rally to 1524.10. June CPI report came in at plus 0.6%. The expectation was for a plus 0.4%. The core rate came in at 0.2%, as expected.
Before the opening, S&Ps were trading at 1519. We expect the pivotal area for today will be between 1518 and 1522. On the upside, key numbers are 1522, 1523.50, 1525.50, 1527, 1530.50, and yesterday’s high of 1533, which was also a three-and-one-quarter-month high.
Look for 1525.50 to be a critical area. 1532 is a key area and 1533.50 is a major objective. On the downside, under 1518 we’re looking at 1516.50, 1515.50, 1512.50, a key area at 1510, major support at 1507.50 to 1508, small at 1503.50, 1502.50, and major support at 1499.50 to 1500.
NASDAQ futures are trading at 4071, down 39. On the CPI news, we made a high of 4117, and are currently trading on the lows since the news was released. NASDAQ cash fell 1919.08 points from 4816.35 on March 24 to 2897.27 on May 24, a 42% decline. It then rallied to 4089.4 yesterday, a 62.2% retracement of that fall. If the NASDAQ cash were able to move over yesterday’s high at 4089, then a further upmove is likely.
For futures, NDU, this means that yesterday’s high at 4135 is important. It may be a near-term high. For today, we see see 4065 and key support at 4049 down to 4029, which includes yesterday’s low at 4045. Below that we have a band between 3997 and 4007. The 100-day moving average comes in at 3938.85.
The pivot point for today will be 4100. Above that we target 4125, 4135, and 4160 to 4165.
Dow cash closed at 10,804.27 yesterday. The Dow fell from 11,144 on April 12 to 10,258 on May 26. It retraced 66% of its fall at yesterday’s high of 10,847. A 75% retracement brings us to 10,923, which we regard as critical for a bullish scenario. A close over this number would target the Dow at 11,037.
For today in the Dow cash, we see major support at 10,751, then 10,732, and 10,717. On the upside, key numbers include at 10,863, 10,896 and then our major number at 10,923.