The June S&P did manage to hold above the critical and psychological 800 level yesterday and the market seems to be holding above that level again in the early action today. Apparently the Presidents message was of little overall importance to the global equity trade, as prices overnight were mixed and all over the board. However, the President did call for global stimulus efforts and Saudi Arabia has apparently responded with an infrastructure program. It is also possible that end of quarter window dressing will serve to leave the stock market with a positive tone in the coming five trading sessions. Some in the market might be concerned about the flow of US scheduled data today, especially with Durable Goods and New Home sales readings on the docket. However, given the capacity to respect support in a number of markets yesterday, seeing anything slightly better than expected from the numbers today, could in the face of the beginning of the Treasury buyback program, give the bull camp a quasi one-two punch.
S&P 500: Down trend channel resistance is seen at 817.60 today but we are partially impressed with the markets ability to hold above the 800 level. As suggested already, we think the bulls need to see some positive action early in the session today in the wake of the scheduled US data or from the Treasury buy back kick off. In other words, we favor the bull case for the first half of the trading session, but it would not be a positive sign for the S&P to be sitting at or below the 800 level into early or mid afternoon trade.
DOW: With critical support this morning pegged at 7,587 and the market already carving out a slight corrective setback from this week’s highs, it would not be surprising to see the market regain some positive momentum today. A critical down trend channel resistance line is seen at 7,720 today in the June Mini Dow and a move above that level today would effectively alter the pattern of lower highs recently put in place. We think that the market will take most of its direction from the durable goods report this morning and that it will take a slightly better than expected reading from that report to clearly put the market into a positive track for the rest of the trading session.
NASDAQ: Down trend channel resistance is seen at 1253.65 and it would not take much upside action today to technically put the Nasdaq into an upside breakout. However, if the Nasdaq can’t get some help from the scheduled numbers or the markets aren’t lifted by the actual start of Treasury buying program, our initial bullishness will shift back into a slightly bearish viewpoint. Perhaps the news from Dell on its server business yesterday will provide an underpin for the Nasdaq, but in general we get the sense that the stock market is poised to react to broad market issues and not to relative strength or weakness within the tech sector. In the end, it would not be a positive for the June Nasdaq to fall back below 1231.25 today.