The DOW was not able to crack its all time high but YM (DOW futures) was the one to watch on Friday. It hit an all time high for a front month contract at 11808 and an orderly retreat followed. The re-drawn chart puts us in a wedge and now clearly sets up the S/R levels. YM 11,600 will be the number to watch in the coming days. The cash index is about 65 points lower so that would be DOW 11,550 or so. On the other hand, bears need to keep in mind that sometimes the cash will follow the futures target which would mean that the DOW could very well put in 11,800 itself in the near future. Nothing is set in stone, including the calendar, which has been the opposite of last year.
The COMP closed the May gap and that was pretty much resistance as the week drew to a close (2272.70). It too is sitting in a bearish ascending wedge, with an upside resistance target at around 2290 and support at around 2245. The 5 DMA provided support Friday, but it was a bearish close at lows and that usually means some follow through on Mondays and probably a test of support which is not far. Must hold is 2236.
Since I am seeing some weakness building in techs, I would keep an eye on NQ (NDX futures). Target support on a pullback will be 1661/1662, confluence 10 DMA, weekly pivot and daily s2. Quite a magnet, but of course watch last week highs at 1683.25
A lot will depend on oil, which is now finding clear support between 61 and 62.
ISM (expected 53.7) and construction spending due out at 10 AM tomorrow. They will be an excuse to sell or buy, thus market moving.
Again, trade it don't love it.
This entry was posted
on Sunday, October 01, 2006 at 7:21 AM.
