Whipsaw!
This market is feeling a little whipsawed, given the recent positive news from Microsoft that provided an upside boost, and now the Q3 warning that is dragging us lower.
This morning, S&Ps are down 910 pts at 1214. We still have this big neutral zone, which is now between 1196.50 and 1227.50. On the upside, within the zone, we have the area between 1213.50 to 1215, then 1218, and critical resistance at 1221.50, and then 1224.
On the downside, we’re looking at yesterday’s low of 1210.50, a key support area at 1207.50, a major support area at 1206.50, then 1203.50, and critical support at 1200.50.
NASDAQ is now trading below yesterday’s low, at 1680 down 44.50. We see support between 1680 and 1672. The Globex low was 1674. If we get lower than 1672, we are then looking for a move to the weekly low of 1663. Remember, in addition to our first support zone, we still have 1680 to 1660 as a key neutral zone.
On the upside, we’re looking for 1690 to 1705 to be resistance. If we get above this, we’re looking for a move to 1718. Along the way, 1715 to 1725 is resistance. In this resistance zone we also have unchanged at 1724.50. Now, if we can get above unchanged and hold it on a 30-min. close, we would expect to see some very sharp short covering that will take us to the 1753 level, and most likely through it.
The Dow, meanwhile, remaims in the neutral zone between 10,400 and 10,750.