Tighter And Tighter
In the S&P futures Pit yesterday, we saw a lot of resistance between 1361 and 1364, which appears to be the “corkscrew effect.” This is putting S&Ps in a tighter range between 1340 and 1365. If we can pop through 1364, we should hit some buy stops.
This morning, S&Ps were trading at 1343, down 530. On the downside, we have 1340 and 1338.50. Yesterday we had a 1341.60 low before rallying back to 1352. Under that, we have 1333.50 and then 1330.50.
On the upside, we have a major area at 1345.50, then 1348.50, 1350, 1352, a key area at 1355, 1358, a major area at 1361, and a cluster from 1364.50 to 1368.50.
The NASDAQ was trading down 200 at 2484. The ballgame area once again is 2550 to 2578. The market has to get above this zone. Every time we trade above 2520, the market begins to grind in a heavy two-sided trade. The market is going to need to make the next move if the bulls are going to stay convinced.
For today, we have resistance between 2505 and 2525, which is a critical area. Above this, look to challenge the ballgame resistance between 2550 and 2578. Any settlement above 2578 is extremely bullish.
On the support side, we see 2480 to 2460; below that look for a move to 2400. The key area is going to be 2410 to 2400. Limit down today comes in at 2421.
The Dow held on to its gains yesterday, losing only 34 points — especially impressive with MRK down $5 and XOM also struggling. We continue to be neutral on the Dow.