Oversold?
With S&Ps up .50 at 1353.80, we think this market could be oversold, so be careful on the short side in the first 45 minutes of trading.
We have resistance on the upside at 1355 and then 1358. If we get above 1358, we may see some short-covering. Above that, we have 1361.50, 1365.50, a key number at 1368.50 and a major number at 1371.50.
On the downside, we have 1350, a key area at 1347.50, a major at 1343.50 and then 1341.50, which is another key area.
NASDAQ is down 12 at 2476.50. First downside target is 2450, which we outlined on Friday. We expect the market to stall on the downside at 2450, as we have support between 2460 and 2440. We have support between 2425 and 2415. Below this, we have some light support between 2405 and 2400.
We have the first level of resistance between 2495 and 2515. If we get above this zone, look for a trade back to the important 2550 level. Any trade above 2550 on an hourly basis should target a move back to 2585.
As for the Dow, it failed again at 11,000, which is a technical negative. Now, it needs to hold above 10,600. As long as it does that, we are still on the long side.
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