The Dow Industrials were able to get back above the 10,600 level early this morning and reverse earlier losses. Ideally, we'd like to see the 50-period MA (thin blue) get turned back around, but we like the fact that the 200-period MA (thin red) is trending higher. Short-term, we'd say support is upward trending at 10,450. MACD is just above the zero level, but starting to level off.
NASDAQ Composite Chart - 60-minute interval.
Yesterday's open right near the 50-period MA (thin blue) and our downward resistance trend line looks to have been too much for the NASDAQ to trade through. It would take a period of three hours of trading above the 50-period MA for us to get excited about the potential for a rally in the NASDAQ. MACD is back below the zero level and starting to turn lower.
S&P 500 Index Chart - 60-minute interval.
The SPX may be the index to keep a close eye on. This index has shown better technical strength compared to the NASDAQ, but the 50-period MA looks to be formidable resistance. The 1,340 level would be a short-term level where traders should have an alert set.
For things to hold together today, bullish traders want to see the Dow Industrials remain in the green. If we were to see the Dow trade back in the red, we'd expect some traders to start picking up their shorting activity. We don't expect too many upside surprises from the NASDAQ and there seems to be few buyers of four-lettered stocks with weak technicals. Traders should continue to trade for profits when trading bullish and don't be looking for any "home runs" today. Traders can still build significant profits by buying NYSE names and those Dow Industrial components that seem to continually attract buyers near support. The Forest & Paper Products Index (FPP.X) is holding onto gains and we'd expect some shorts in the group to start getting edgy.
Global markets trade lower while looking for direction
Asian/Pacific stock markets slip as Wall Street's post-holiday rally fizzled and the U.S. presidential battle kept getting murkier. Hong Kong's Hang Seng slid 0.25%, but financial stocks were up 1.63%, helped by gains of global banking group HSBC Holdings which were up 1.83%. Japan's Nikkei 225 ended fractionally lower as mobile telecom giant and market heavyweight NTT DOCOMO jumped 6%, while the broader market fell prey to profit-taking. South Korea's Seoul Composite led Asia's decliners with a loss of 3.09%. Europe's main markets pared some of their early declines, as investors showed some enthusiasm for defensive stocks in chemical and retailing sectors. France's CAC 40 is lower by 1.34%, Germany's DAX is off fractionally, and London's FTSE 100 declined by 1.54%.