Watch…And Wait
For daytraders out there, this morning is a time to watch, wait (clean off your desk, write some e-mails), but not to participate in this trade until after the FOMC announcement.
If the Fed eases 50 bp, our upside targets are 1052 and 1063. On the way to 1052, 1045 to 1048 is resistance. Above 1052, 1055 to 1057 is resistance, and then the 1063 target.
On the downside, if we get a reversal off the Fed announcement, we have support between 1036.50 and 1035. Under this, we have a band of support from 1032 to 1027. If this band is broken, we’re looking for the 1021 level to trade, and we have support in that zone from 1022.50 to 1020.
Nasdaq is trading down 6 at 1153.50. On the upside, the first key will be for the market to spend time trading between 1160 and 1170. If we can get above 1174, we’re looking for the market to move to 1188. Along the way, 1183 to 1184 is resistance.
On the downside, the first band is between 1154 and 1146. Below this, we have yesterday’s lows at 1136. We have support between 1138 and 1135. Beneath that, we have support between 1130 and 1127. Below 1127, look for 1117.
The Dow had a little give-back yesterday all session — until the closing hour. Once again, the market settled near its highs of the session and above the 8750 level.