Monday, Monday
After last week’s volatile action, S&P futures were trading at 1492 this morning, up 2.50. The important zone today will be between 1486 and 1490. If we go down to test 1486, and then make it above 1490, it looks like our numbers to the upside will be 1492, 1495, 1498 and a band between 1500 and 1503.50. The 1500 area is key. And we have a major number at 1504.
On the downside, below 1486, we have major support at 1483, small at 1481.50, 1480 and then a key area at 1477.50-1478. Under that, we have a major area at 1472. We are trading, basically, in a wide range of 1452 to 1533. Until the market breaks out, we’re going to have volatile days within that range.
NASDAQ futures were trading up 25 at 3964. For the last few weeks, we’ve been targeting a run to 4140. Last Monday’s high was 4135. From that point we participated in a solid sell-off that has yet to violate the uptrend. If we were to close below 3850, it would do so in the short-term.
One issue for traders to be aware of is the deterioration of the semi-conductor index (SOX), which is usually a leading indicator. Another issue we’ve been looking at is the extension from the 20-day moving average as last week we crossed readings of more than 4%. We have since come back to under 1%.
For today, we see support between 3915 and 3900. Any trading below 3890, should lead to a quick move down to 3860. 3850-3841 is good support. If we trade below 3841, look for support to be tested between 3815 and 3785. Again, any close below 3850 is short-term bearish.
On the upside, 3969-3975 is resistance. If NASDAQ gets above 3969-3975, then 3996 to 4007 is critical. If we can close above that on an hourly basis, we think it will bode well for the remainder of the week, and lead to a retest of the 4140 area.
Dow futures settled Friday at 10,790. We have strong resistance between 10,850 and 10,865. If the market can close above this zone, it targets a run toward 11,000. We have good support between 10,750 and 10,725. One of the keys today will be settlement. If we settle below 10,725, it is bearish as we would be below every major moving average.