Volatility Picks Up
Looking at yesterday, besides the obvious bearish move in the final hour, you have to note that volatility has definitely picked up in this market.
This morning, S&Ps are trading up 2.50 at 1133.50. The first key level for us is going to be 1140. We have a resistance zone between 1135 and 1140. If we can get above 1140, we’re looking for the market to repair some of the damage from the final-hour selloff yesterday.
Looking at the downside, if we can’t get above 1135-1137, the first level support level is 1132.50. Below this we think Thursday’s low zone will be exceeded between 1126.50 and 1125.50. Bear in mind, along the way we have good support between 1128.50 and 1127.50. If we get below Thursday’s low area, we’re looking for the same numbers as yesterday: a move to a key support zone between 1120 and 1118.50.
Nasdaq is trading at 1429, up 2.5. Today on the upside, we have resistance between 1436 and 1441. If we get above this, we’re looking for a move to 1460. However, it is important to note that we feel that we have scale-up resistance from 1445 to 1460.
On the support side, if the market cannot get above 1445 to 1460, the first target on the downside is 1420. That is just below yesterday’s low at 1421. We have light support between 1423 and 1418. Below this, look for 1410.
As for the Dow, an extremely disappointing close — 180 points off the high for the day and below 10000 for the third straight session, even though we gained 48 points on the session. The downside target remains 9750. The market needs to close above 10,050 to look more stable.