Sell ’em!
Good morning. Today the equity markets will focus on the overnight selloff in worldwide equity markets, the release of the June Factory Orders report at 9:00 CST (expected +5.5%), the continued selling in the NDU on globex, currently limit down at 3415 offer and the SPU trading off 1300 at 1439.50.
For today’s session, we have support in the SPU between 1438-1436. If this fails, look for 1429. Below 1429, 1425-1423 should be tested — below this, limit down is located in a large support zone at 1417.50. On the upside, we need to get above the 1441-1443 zone. If this happens, we should test resistance between 1447-1449. Any trading above unchanged at 1452.50 should be construed as a buy signal with a target of 1466.
Here are some retracement levels of note : For the up move from 1289.20 (oct.99) to 1595 (contract high 3/24/00) a 61.8% comes at 1406, a 75% is 1365.60 and 80% is 1350.30. In general, today’s session should be highly impacted by the performance in the tech sector.
In the NDU, we are looking for tremendous pressure on the open, as we are offered at the limit. To get out of immediate trouble, we need to get above the 3460-3480 resistance zone. If this happens, we could erase this damage and move towards the 3560 zone. The more plausible scenario is a strong run lower to a major support zone between 3320-3300. This would place us squarely into the 2nd limit down area of 3323. If the market fails to hold support in this area, all bets are off — 3250 is the first target, followed by 3220-3200.
Here are some retracements — for the upmove from 2975-4135, a 61.8% is 3418, a 75% is 3265. Our overall opinion for today’s session should be a volatile open with potential for selling. However, expect large intraday swings, especially in the afternoon when short covering may become prevelant before Friday’s Employment report. Our morning pivot numbers are far away due to the magnitude of the selling in Globex – 1445-1448.