The Numbers Game
With PPI today and CPI tomorrow we’re probably going to have a big range and be choppy, and then close somewhere near unchanged. Today, PPI and Retail Sales were released, slightly more benign than anticipated — leading to a small rally in both interest rates and equity indexes. Tomorrow brings CPI.
In light of all this, S&Ps were trading up 700 points at 1514.50. The first area on the upside will be 1516, then a major number at 1518.50, 1520, Tuesday’s high of 1521, then 1523.50, and 1525.
On the downside, we’re looking at 1510.50, 1508.50, 1502, 1500, 1499, and a key at 1496.50. One note: We would have liked to have seen a bigger spike down yesterday to entice more sellers into the market to help spark the rally.
NASDAQ futures are up 60 at 3865. Oracle
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PowerRating) called to open about 3.50 higher, ahead of its earnings release after the close today. A couple of key things happened yesterday. Obviously, we had a pretty decent rally after a poor opening. We made a 3671 low in the first five minutes of trading, and we really never traded below 3700 after the initial surge up. There was definitely a sense of bottom fishing. Keep in mind, this index rallied in spite of Intel
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For today, if you look at a daily chart, we are in a wedge pattern, which is typically broken after a spike down and then a trade back up through the upside. We believe that a trade from 4200 down to 3671 may in fact be that spike down. The critical area is 3845 to 3860. We’re trading there this morning on Globex. If this market can hold here, it should be a launch pad for a move back to 3950. If it fails here, expect more of the same type of trade: choppy, volatile and most likely lower.
Above the key resistance area, 3905 to 3921 is critical. If we get above that, we should hit the 3950 target. If this were to accelerate, we could trade as high as 4000. Any settlement above 3865 should be construed as bullish. On support, we see 3815-3800, 3780-3765. If we get through 3765, look for a run down to 3725. Under this, 3705 and 3695 is support. Below 3700, there will be a massive reversal in the market’s burgeoning bullish psychology.
The Dow continues its sideways action. Still trying to find its base before it can move higher.