ON that weak market and gap at SPH 1320 ..we need to take care of that.. and 3500 resistance, market pundits
have a point..
<<The stock market found support on increasing and heavy volume yesterday, and some, but not all, characteristics of a "fear-based" low were recorded. An extreme NYSE TICK Index reading (-1004) was recorded for a third straight session, and the CBOE Volatility Index (VIX -1.39 28.25) spiked above the 30 level. Several factors, however, argue for maintaining a cautious approach to the markets for the time being. 1. The put/call ratio complex was neutral, indicating little fear/anxiety on the part of option speculators - once again, this data suggests that a greater downside climax may be needed to create a sustainable low. 2. An offsetting, high NYSE TICK Index reading (+674) was recorded early during yesterday's rebound, suggesting overhead resistance. 3. The March Bond (USH -30 89'22) continues to slide, dropping to new contract lows with the yield on the 30-year Treasury rising to (6.63%). All clients were advised in mid-Dec to expect new bond market lows in the January/February period. 4. The daily candle in the March S&P 500 Futures (SPH +1.70 1413.50) was ambiguous - as was the close for the NASDAQ Composite. 5. Technology stocks will have to contend with the continuing barrage of negative announcements - add Gateway computer to the list of casualties which included Amazon and BMC Software yesterday. 6. Economic data from Q4 is just starting to roll in with Friday's release of the December employment report. The next few days will either confirm or discount recent price support. We still believe there is a possibility that the March S&P's will work to the (SPH 1350-1320) range before a true bottom is found. >> |
