Pause And Reflect
The futures market is still sorting through Fed Chairman Greenspan’s comments yesterday, which while easing interest rate fears is also putting a focus on a slowing economy. This morning, S&Ps were trading at 1511.40, minus 4.80.
Stock index futures were trading lower after yesterday’s sharp rally. In addition, AOL was lower on a report of lower sales growth. Agilant Technologies, the Hewlett spin-off, was sharply lower on news of a shortfall in earnings.
With that mind, for today as long as S&Ps stay above 1508.50, and spend more of the first hour above 1512.50, the rally should continue with targets at 1519, 1521.50 and 1525.
On the downside, if SPUs trade below 1505, and then cannot get over 1510, they should test 1503.50, then 1498 to 1497.50, and then the week’s low at 1493.50, which was made on Wednesday. Also, today is a minor expiration day (for July) in S&P options, which could have an impact in the last hour of trading.
NASDAQ futures were trading at 4042, minus 21. NASDAQ led the rebound yesterday with a 3.2% rally. On the upside today, as long as NDU can stay above 4040, or at least close the first hour over 4040, the rally should continue, with targets at 4078, 4097, 4112 and 4125-4135, with 4135 being Monday’s high as well as a three and one quarter month high.
On the downside, if NDU goes below 3985 and then cannot trade over 4010, they should test the 3940-3935 area. 3931.60 is the 100-day moving average. 3913.50 is a one-week low settlement (Wednesday).
The Dow cash closed at 10,843 yesterday. There is a key resistance area in the Dow at 10,886, and above that another major area at 10,908. These two numbers could provide strong resistance. On the downside, we have support at 10,822, 10,812 and a major area between 10,799 and 10,790.