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Market Updates

Equity futures lower

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It didn't take long after yesterday's Fed rate cut of 50-basis points for many technology stocks to come under pressure and we're seeing a bit of a carryover this morning. S&P futures are currently down 2 points, NASDAQ futures are lower by 19 and Dow futures are off 23. Fair value today for the S&P 500 is $7.55 with buy programs set at $9.34 and sell programs set at $5.98.

NASDAQ Composite breaks another upward trend

Subscribers that have been with us for more than a week knows yesterday's break of an upward trend isn't a first for this index. This is a sign of weakness and traders should somewhat defensive in their trading.

NASDAQ Composite Index Chart - 60-minute interval.

Yesterday, traders saw two level of support broken near the 2,800 level and that should have been a sign that weakness was starting to be seen in many four-lettered stocks in the NASDAQ Composite. It's a level we have been talking about for the past couple of days. Our next level of support looks to be near 2,685, which is a recent low from January 26th. If that level were broken to the downside, the 200-period (NOT 200-DAY) at 2,600 could be tested. Bearish traders can use these levels as targets for any shorts or put options entered into on the break of upward trend yesterday.

Big buyers in bonds!

For the last two trading sessions we've seen the market getting more aggressive in the bond market as buyers seem to love a 5.2% yield. This has been a good sign that caution should have been used for bullish traders in many technology stocks. This morning, bond yields are falling precipitously as money continues to seek out treasuries.

10-year Treasury Note YIELD Chart - 60-minute interval.

For two days we were on the alert for weakness in stocks as yields in the bond markets started falling. This was a sign that money was moving into the Treasury bond market. Money that could have moved into stocks chose otherwise and bought bonds instead. Traders that were monitoring upward trends and assessing risk to support levels should be doing fine this morning. We'll continue to watch bond yields as they've been an excellent heads up to moves in equities.

Jeff Bailey
Staff Analyst

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