This Should Be A Market Mover

  • February 9, 2004
  • Chris Curran


Stock index futures finished out a shaky week with a
stronger performance on Friday after market players seemed pleased by
the January Employment report. The headline job creation number was less than
expected, but it did show that a decent amount of job growth was taking place.
At the same time, the fact that the number of news jobs added was not too high
also pleased the camp that may have been were worried about a possible rate hike
in the near-term. Despite the solid performance on Friday, the market’s
performance in the middle of the week generated a good amount of nervousness.
In particular, during Cisco’s conference call, CEO John Chambers stated that
some business leaders remain surprisingly cautious toward capital spending and
hiring. This news created a minor panic in the tech sector because of all the
recent talk about an uptick in corporate spending, and we saw money flow into
defensive-type stocks that do well in slow growth periods. Nonetheless, the
tech-heavy NASDAQ only posted a 2-point loss for the week, and the jury is still
out on whether the current action is a simple pause/consolidation after an
explosive rally, or the start of a more serious correction.

The March SP 500 futures closed
Friday’s session with a gain of +12.50 points, and finished the week with a gain
of +9.00 points. Volume in the ES was estimated at 646,000 contracts, which was
behind Thursday’s pace, and below the daily average. On a weekly basis, the ES
posted an inside week with a higher close, and continues to form a cup and
handle as it holds its 200-week MA support. Looking at the daily chart, the
contract reversed off of Thursday’s doji to settle back above its 10-day MA and
20-day MA resistance. On an intraday basis, the 60-min and 30-min charts closed
with cup and handle patterns and also showed great examples of how trend line
support becomes trend line resistance.


Looking
ahead this week,
Fed Chief Alan Greenspan will be making his semi-annual testimony in front of
Congress on Wednesday and Thursday, which promises to be a market mover. More
than anytime in the last several decades, the U.S. economy is extremely interest
rate-sensitive because of the current extreme debt and leverage levels. Even
the slightest hint of higher interest rates by Mr. Greenspan would likely cause
all sorts of problems for stocks. Similar to the “irrational exhuberance” fiasco
a few years ago. Greenspeak watchers will be listening for any variation on the
word “pre-emptive.” This is an election year, so the common thought on Wall
Street is that the Fed won’t do anything to hurt the chances of the President
being re-elected and for Greenspan being re-appointed. While this may very well
be the case, any time so many all believe the same thing and are all positioned
in the same fashion, often sets the stage for the opposite to happen.

Daily Pivots for 2-9-04

Symbol Pivot R1 R2 R3 S1 S2 S3
COMP 2051.31 2076.71 2089.41 2114.81 2038.61 2013.21 2000.51
INDU 10550.32 10636.11 10679.20 10764.99 10507.23 10421.44 10378.35
NDX 1489.40 1508.50 1518.04 1537.14 1479.86 1460.76 1451.22
SPX 1137.98 1147.57 1152.38 1161.97 1133.17 1123.58 1118.77
ESH 1135.33 1145.67 1152.33 1162.67 1128.67 1118.33 1111.67
SPH 1136.00 1145.00 1151.00 1160.00 1130.00 1121.00 1115.00
NQH 1485.17 1510.33 1526.17 1551.33 1469.33 1444.17 1428.33
YMH 10524.67 10606.33 10656.67 10738.33 10474.33 10392.67 10342.33
BKX 994.25 1003.83 1008.64 1018.22 989.44 979.86 975.05
SOX 513.16 526.42 533.44 546.70 506.14 492.88 485.86
QQQ 36.98 37.43 37.73 38.18 36.68 36.23 35.93
SPY 114.12 115.03 115.62 116.53 113.53 112.62 112.03
SMH 42.01 43.05 43.59 44.63 41.47 40.43 39.89

Weekly Pivots for Week of 2-9-04

Symbol Pivot R1 R2 R3 S1 S2 S3
COMP 2054.10 2095.40 2126.80 2168.10 2022.70 1981.40 1950.00
INDU 10540.37 10646.06 10699.10 10804.79 10487.33 10381.64 10328.60
NDX 1489.18 1517.36 1535.76 1563.94 This Should Be A Market Mover
Chris Curran
February 9, 2004 9:00 AM
Stock index futures finish