Morning Commentary for Monday, August 23, 2010

Good Morning SOM traders…Last week the market reacted to news events yet again with gaps up and down and two days closing with multiple SD moves. Looking forward we have a busy week of economic news that can move the markets (all times est.): Tuesday 10:00am Existing Home Sales, Wednesday pre-market Durable Goods followed at 10:00am by New Home Sales, Thursday pre-market Weekly Jobless Claims and Friday pre-market Adjusted GDP followed at 9:55am with Consumer Sentiment. Also Thursday-Saturday is the annual Fed conference in Jackson Hole, WY with Bernanke speaking on Friday but news can come from the conference on any day at any time. So a BUSY, BUSY week and positions need to be well hedged in both directions!!! Overnight the Asian markets were slightly lower and at the time of this writing Europe up just under 1%. The US index futures are slightly higher so we should expect a slightly higher opening today.

Technicals…Last week the S&P traded in a tight range of $1,065-$1,100 but with large intra-day and two closing SD moves. The combined 20, 50, 200EMAs and the prior swing high/low are all at the $1,100 area which is now major resistance with swing prior swing lows of $1,065 (also the bottom trend line) followed by $1,040 and $1,010 as levels of possible support. Both the DJI and NDX broke below and closed almost exactly at their 200EMAs on Friday. Here is what I see for technical support/resistance (all MAs are 6 month/daily, exponential):
DJI: support $10,000 (prior swing low), resistance $10,270 (200EMA)
SPX: support $1,065 (prior swing low), resistance $1,095 (see above)
NDX: support $1,768 (prior swing low), resistance $1,825 (200EMA)
RUT: support $603 (prior swing low), resistance $630 (50EMA)

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Tagged as: ndx, rut, spx, vix