Looking For The Bias
For the trade today in S&P futures, the first level we’re looking at is 1383-1387. This zone should be choppy, and how we trade off this zone should determine the bias for the market.
S&P futures are trading at 1383.20, which is up 390. Light volume overnight. Yesterday was a disappointing day for the bulls as the market could not sustain trading above 1395 for any real length of time. On the flip side, volume was relatively light.
Above this zone, the market should make a run towards 1395. We have another crucial zone between 1392.50 and 1396. In other words, yesterday’s day of trading produced volume at those two levels.
We do not expect the market — barring news — to just leap through these. If we get above the 1396 level, it does pave the way for a move to 1409, which we have as an upside target. Along the way, 1402-1405 is resistance.
On the support side, below our zone, look for an eventual trade to 1370. Along the way, 1379.50 to 1376.50 is support, and beneath that 1371.10 to 1369.50. If this were to fail, there appears to be a good chance for a move to 1348.
In general, a lot of indecision. We have a minor options expiration today, and there are many external factors involving the market right now. This afternoon, depending upon what happens today with absentee ballots and the deadline, could have a large impact on the afternoon trade. Expect it to be choppy and relatively thin.
NASDAQ had a disappointing day yesterday for the bulls as the market was hit for about a 5% loss. Currently trading up 3400 at 2973. Most of the large caps are called to open $1 or so higher, but the trade continues to run the same pattern — that is we rally from new lows and then fail to sustain a base, and then go back down.
There is very little confidence in this market right now. Other than trading rallies, there is just continued leaking on the downside, and yesterday’s trade was a great example of that. What’s happening is the volatility is lessening on the downside. Where the volatility becomes greater is in the short-covering rallies.
For today, we have support between 2930 and 2920, then 2908 to 2897. If we trade through that, look for a move to 2840 with support between 2855 and 2837. One thing: 2844 is limit down so the 2840 target may be unhinged by that. Under that, the weekly low of 2755 comes into play. Along the way, expect some support around 2825-2820, and from 2795 to 2785.
On the resistance side, we see 2955 to 2978. We’ll open up in this band. Above this, look for a move to 3025. We have resistance between 3020 and 3035. Above this, we think 3075 will contain all rallies, barring news.
As for the Dow, it continues to be pretty stable in light of everything. We don’t anticipate that changing.