Fed Watch
Expect the S&P futures market to be extremely quiet this morning as the FOMC holds its one-day meeting today, with an announcement expected at 1:15 p.m. Central time. One of the key things with the Fed meeting is whether the bias will be changed moving forward toward “easing.”
Right now, there is a 50-50 chance, according to the futures market, that they will change the bias. Odds are that this meeting will not have much impact on the remainder of the session.
S&Ps were trading this morning up 550 points at 1461.70. We are right at a key area at 1462.50 to 1464.50. If we get through this key, area our targets are 1466, 1471.50, then Friday’s high at 1472-1473, 1477.50, and 1480.50.
On the downside, we see 1458, 1456.50, a key at 1454, 1451.50, another key at 1450, and a major at 1447.50, which was yesterday’s low. The Morning Pivot is between 1455 and 1457.
The NASDAQ was trading up 50 at 3578.50, after posting a four-month low settlement on continued selling in the big-cap sector, as well as the beating in the most recent high flowers. The question now is, are we oversold?
The NASDAQ Comp on the close yesterday was around 11% below its 200-day moving average. We are getting into the area at which it pays to nibble on the long side. This does NOT mean to mortgage your house and go long NASDAQ futures. Rather, it means to begin to nibble and establish a light long position for an ensuing Q4 rally.
For today, we see support between 3540 and 3531, then 3511 down to 3495. Below 3495, look for 3450 and most likely a move down to 3420. The key level here is the cash market. In the NDX, our August low was 3341, which would equate to a futures price of around 3390.
With any settlement below this level, we should then retest the April lows of 2900. Resistance is at 3575 to 3588, then 3605 to 3620, which is the key zone that we outlined yesterday as support. If we can hold above 3620, we think yesterday’s high of 3663 will be exceeded on our way to 3715.
In the Dow, we saw some flight to quality, and also IBM
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PowerRating) gained back everything it lost on Friday. The market is stuck in a range between 10,900 and 10,600. Only a close below 10,450 would be a negative. We’re still looking for 11,000 in the short run.
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