Gathering Steam

After settling at a steep discount to cash yesterday, S&Ps were trading up 7.00 at 1207.20 this morning.

The key level for today is like an “on/off” switch, and that is located at 1205.50. This level is critical for the first-hour close. If we are above it, we’re looking for a rally to the 1215-1216.50 zone.

If we are below 1205.50 after 9:30 a.m. Central, our first stop is 1202. Below that, we’re looking for 1198. Along the way, 1200.50 to 1199.50 will be support.

NASDAQ is trading up 30 at 1732, which is 5 points above yesterday’s high of 1727. Our key number in the NASDAQ is 1720, after the first-hour close. If we’re above 1720 after 9:30, we’re looking for 1758, which will fill a gap from July 5. Along the way, we still have resistance from 1725 to 1735, and then we have Friday’s high of 1744.

If the market is below 1720 after 9:30, our first target is 1685. Along the way, 1710 to 1700 is support, and then 1688 to 1682.

As for the Dow, it stabilized yesterday. One of the brightest spots in the market was the Drug sector, up over 2% on the day.