Fuel For A Rebound
Today the markets were digesting the last two
days’ big volume and point gains. On top of that, traders were deciphering what
this morning’s economic reports reflected and were somewhat uncertain about
earnings for some companies. The U.S. unemployment rate unexpectedly fell to
5.6% in January, the lowest in five months. This could be another sign the
recession may be ending.
In a separate report, the factory index of the
Institute for Supply Management rose to 49.9. That’s the highest since the
manufacturing slump began 1 1/2 years ago and shows orders and production
increased. This may help spark hiring in coming months and fuel a rebound for an
economy that slipped into recession last March.
On the weekly chart, the S&P 500 has a
longer-term down trendline starting at the November 2001 highs and has been
trending lower. We saw the S&P break below support this week, but it was
able to rally higher and close above the downtrending line. If the S&P 500
breaks below support, look for initial support around 1085. The March S&P
500 futures
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The 1123.00 area is support.
The March Nasdaq 100
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trading in a range between 1600 and 1500. Today the March Nasdaq 100 closed at
1535, down 18.50. A break above 1550, the 50% retracement for this range, could
signal higher movement.
The March Dow futures
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unchanged at 9907.00. The March contract is still eyeing its 10,000 overhead
resistance.
There has been a threat of striking workers at
refineries across the U.S. for the past couple of weeks. Those threats did
little to frighten crude traders from moving the values up last week. This week
the energies were moving lower on concerns of higher inventories and warmer
weather. This morning a new labor contract was reached, and it caused a positive
reaction in the energies.
March crude oil
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of fortune, bouncing off of its 18.50 support on Wednesday and then breaking up
and closing above its 20.00 resistance today. Crude oil for March delivery
closed up .900 to 20.38 a barrel. On a similar note, March heating oil
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closed up 2.15 to 55.31 to break its resistance level of 54.00.Unleaded gasoline
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blowing by its 58.00 and 60.00 resistance levels to close at 60.34.
Precious metals were trading mostly higher
Friday. April gold
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Mercantile Exchange broke above its resistance level of 286 to close at 286.800
a troy ounce, up 3.900. March silver
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trading range for the last couple of weeks. Today it broke out of its
consolidation to 43.30. After yesterday’s nice breakout, March copper
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continued to move higher closing up .30 to 73.65.