Pretty Good Shape
Taking a step back — despite all the volatility from economic, earnings and world political concerns — this market appears to be in pretty good shape. I have seen relentless buying of S&P futures by major institutional players, especially in the past week.
Another bullish factor to be taken from yesterday is that it could signal the end of tax-loss-related selling by mutual fund managers, since their fiscal year ends next Tuesday.
As for today, S&P futures were trading up 800 at 1379.30. Early morning key will be 1384. We need to get above this level. Then we have a key level at 1388, 1389.50 and a critical level at 1391.50. Above that, we see 1393.50 and 1395.50.
On the downside, we see support at 1375.50, 1373, a major area at 1369.50, and 1367, which is also a key area. The market could see a range today of 1367 to 1384. The Morning Pivot Area is 1378 to 1379.
In the final 90 minutes of trading, NASDAQ rallied yesterday 8.9%, after making a new contract low. Now trading up 50 handles at 3277 on a very bullish post-earnings conference call by JDSU, which is called to open about $8 higher.
The one thing that has not changed is the fact that the market still has only been able to rally from lower levels. If we are to move higher for the rest of this year, this market needs to base and then collect the buying strength for its move.
Today will be interesting due to the fact of such a massive rally in the afternoon. We’ll see if the buyers can hold it up. The lead stocks in this move have not been the old guard –
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We see resistance between 3290 and 3305. If we get above that, look for a move to 3360. Along the way, 3330-3335 is resistance. Above 3360, look for a move to 3405, with 3380-3385 as resistance.
We see support between 3250 and 3235, then 3215-3208. If we get below 3208, look for a move to 3140. We have a support band between 3155 and 3130. With any trading under that, look for the 3107-area, which is a 50% retracement of yesterday’s range.
As for the Dow, this market once again was rebuffed around the 10,460 level. We sold off pretty well into the close, losing 60 points into the bell yesterday. Obviously this level in the Dow is becoming more and more critical. The market needs to close above 10,460. If it does not, expect short-term pressure in the index.
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