How Low Can It Go?
S&Ps are trading down 3.00 points at 1129, which is significantly off its overnight session lows at 1115.50. This raises the question of how low can this market go before we see some kind of stabilization?
For the S&Ps today, we have a neutral zone between 1137.50 and 1142. Above 1142, the market begins to look a little bit better, and should lead to a trade up toward the 1155 area. The first step of resistance above 1142 will be 1148-1150.
On the downside, below our neutral zone, we look for 1124 to trade. We have support between 1125 and 1123. Below this, the ultimate target becomes 1113.
NASDAQ is continuing to be the relative strength leader, trading at 1657, up 2100 on good volume of over 1200 contracts. A hopeful sign of stability was the fact that NASDAQ settled down only one point yesterday.
For today, we have critical support between 1620 to 1600. We have resistance between 1655 and 1660. Above this, look for 1700 to trade, which would be above yesterday’s high. Along the way 1675 to 1690 is resistance.
The Dow can’t be much more negative than this: closed below the 2000 lows. It’s been the final shoe to drop. You have to go back to Q1 ’99 to find the Dow at these levels. In those levels, that entire quarter produced settlements between roughly 9100 and 9400, which means we should have some support in there.