Have We Found The Floor?
The big question — which the market will answer today and in subsequent sessions — is whether we have found the floor.
This morning, S&Ps are trading up 12.20 at 1197.50 on huge overnight volume of nearly 6000 contracts. The big news was
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PowerRating), which pre-announced that it will have better-than-expected sales and earnings for the quarter. Last night the futures traded as high as 1204.80.
Right now, we are tending to find that the market is comfortable between 1201 and 1197. We would expect our opening to be somewhere in that range. Now the first key level is going to be 1193 to 1194. As long as we can maintain above that zone, we should find a potential move to 1210. One of our key numbers yesterday was 1197, and then 1200 and 1202.50. If we get above this, the run to 1210 looks much better.
On the support side, the first key level is 1194-1193, as we outlined. Below that, we have key support between 1190.50 and 1188.50. Yesterday’s high was 1192, and the market did not trade above 1190 for very long yesterday. If we get below this support zone, 1186.50 should be the downside pivot.
NASDAQ is trading up 66 at 1726. We’re already in the middle of the recent high zone between 1720 and 1735. We think the key is above 1735. If we can get above this number, we think that the market should make a move first to 1758 and then to 1785.
On the downside, 1719 to 1735 is our neutral zone. If we fail below this zone, the first stop should be 1690. On the way, 1705 to 1700 will be support.
The Dow is called to open significantly higher. It was able to perform yesterday and hold comfortably above 10,000. This remains the key.