Eyes On The Indices
Yesterday, S&Ps performed fairly well until the NASDAQ turned downward. Today, what happens in the NASDAQ and the Dow will have a critical impact on the S&Ps.
S&Ps are trading down 800 at 1350.80, a key area. Yesterday, S&Ps looked very strong between 1362.50 and 1365. We saw a tremendous amount of buying here. Then when NASDAQ turned downward, the buying in the S&Ps dried up.
On the way down, we see 1350.50, 1349.50, 1348 and 1346.50, which would fill yesterday’s gap from the opening. Then we have 1344.50 and 1338.50.
On the way up, we have a key area at 1353, then 1354, 1356.50, 1358.50, 1360.50, 1361.50, a major area at 1362.50 and then 1364.50, which buyers defended strongly yesterday morning and then gave up.
NASDAQ was called to open 40 lower at 2756.50, which is below yesterday’s low and also is below the cash settle.
Keep in mind two things: 2682.50 is our contract-low settlement from Wednesday, and 2676 is the low print on Wednesday. The market appears to want to test this level.
On the support side, we see 2745-2738, then 2715 to 2705, then 2695 to 2675 will be critical. If we close on an hourly basis below 2675, look for the pattern eventually to trade down to 2550.
We see resistance at 2780 to 2796. Above unchanged, the key area is 2820 to 2830. If the market can hold above this zone, look for a move toward 2900. We have resistance between 2875 and 2890. Above 2890, yesterday’s highs of 2930 become probable.
But that is in a big resistance zone for us — 2920 to 2940. Yesterday we said that any settlement below 2850 was a negative. Today, the market will need to settle above that level to take the short-term pressure off.
For the Dow, it will be interesting to see if it can build on yesterday’s rally. The performance in the retail stocks, led by Wal-Mart
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PowerRating), was stronger than anticipated. And today it will be critical for those stocks to follow the sharp move up yesterday. The Dow is also of critical importance today.
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