Quiet Post-Holiday Trade
The market appears to be digesting the recent information regarding the Presidecncey and the historical norm of a Christmas Rally with light buying interest.
The SPZ opened at 1360 and has traded in a very narrow 900-point range since that time. However, the NDZ has fallen nearly 100 handles off its high and is trading near unchanged on the session. The DJIA continues to be the catalyst of support in the SPZ as it is higher by over 100 points — if this were to reverse, things could get a little ugly.
The key to the rest of the trade will be the SOX, the Networkers and more importantly the, what we call, second-tier Nasdaq stocks. These include Network Appliance
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PowerRating), Verisign
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VRSN |
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PowerRating), Veritas Software
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PowerRating), Ariba
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ARBA |
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PowerRating) and Sycamore
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PowerRating). If these issues continue to be offered, it will lead to a move around 2750 in the NDZ.
As for the SPZ, the inability for the market to close above the key resistance cluster of 1361.50-1365 on a 30- or 60-minute chart is a negative. In addition, the rally on light volume we saw Friday may need to be rectified before this market is ready to move higher. As for the trade, I continue to look to be a seller of rallies for a move to 1351.
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