Morning Commentary for Monday, February 28, 2011

by Steven Chanin on February 28, 2011

Good Morning SOM traders. The bull market remains intact as last week’s sell-off was bought up on Friday and based on the pre-market futures that looks to continue today. Looking forward…we have a busy week of economic news that could move the markets (all announcements are pre-market, 8:30am, unless indicated and all times are EST) – Today: Personal Income, Pending Home Sales (10:00am), Tuesday: ISM Manufacturing, Bernanke speaks (10:00am), Wednesday: ADP Employment, Bernanke speaks again (10:00am), Thursday: Weekly Jobless Claims, Friday: Monthly Employment Report. Overnight the Asian markets were slightly higher and at the time of this writing Europe is up higher just under 1% and the U.S. index futures are higher.

Technicals…All of the indexes closed below their respective 20EMAs by last Wednesday but did not cross below the 50EMAs. On Friday all of the indexes regained and closed above their 20EMAs except the DJI which closed 1 point below. This was very bullish action and allowed the overbought oscillators to unwind a bit during the week allowing for a technical move higher. Here is what I see for support/resistance (all MAs are 6 month Exponential):
DJI: support: $12,132 (20 EMA), resistance: $13,150 (2008 swing high)
SPX: support: $1,315 (20 EMA), resistance: $1,433 (2008 swing high)
NDX: support: $2,341 (20 EMA), resistance: $2,594 (2001 swing high)
RUT: support: $810 (20 EMA), resistance: $847 (2007 swing high)

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