Market SnapShot for Monday, June 15, 1999
The June S&P futures traded in a tight range today, inside the range made on Friday. We will be watching for the market to enter breakout mode tomorrow if it can break today's low or today's high. The lower boundary of support is in the 1295 area with key support at 129050.
In general, cyclical stocks held up the Dow Industrials while the S&P and NASDAQ were hurt by the continuing slide in Internet stocks. This week will be a long one, with a slew of economic statistics coming out midweek. Friday will be triple witching, with the expiration of futures, options and options on futures. Position squaring will be in effect during the week.
Our comments on the S&P 500 cash index, the SPX, have not changed. After the all time high made on May 13, the market pulled back, bottomed on June 2, and began a bounce. On the daily chart, the September S&P recovered slightly more than half of the losses but found resistance in the 1350 area where the 50-day moving average is located overhead. At this time, we are expecting a test of the June 2 low shortly.
We have drawn a pair of parallel lines on the daily chart of the S&P 500 cash index, the SPX. One line is at the all time high of 1375.98 and the other is at the recent low of 1277.31. Resistance overhead is at 1327, 1350.50, 1367 and 1375. Support is at 1277, 1260 and 1220. The June 2 low of 1277 is key support. Should the low not hold we would be looking at the weekly chart for support.
On the weekly SPX chart, a one-third pull back of the intermediate uptrend from the October 1998 low targets approximately 1200. The 200-day and the 50-week moving averages are also at approximately 1200. The previous all time high is also in the 1200 areas.
During the trading day, we analyze and trade the S&P 500 stock index and Treasury bond futures because they are two of the most closely watched financial futures contracts traded around the globe. They lead the market during the U.S. market hours and overnight trading sets the tone for the open in New York. What happens in the trading pits in Chicago has tremendous impact on the underlying cash indices, interests rates, and market sentiment in general.
Individual investors can take advantage of index-based investments by visiting the NASDAQ Amex market site to research SPYDRS, Dow DIAmonds, and NASDAQ 100 QQQ at options.nasdaq-amex.com |
