Stock futures are mixed to lower this morning with S&P futures off 2, NASDAQ futures are down 22, but Dow futures are higher by 2 points. Fair value for today is $6.34 with buy programs set at $8.20 and sell programs set at $4.78. For a good explanation of fair value, jump over to www.programtrading.com.
NASDAQ Composite Index Chart - 60-minute interval.
Right at yesterday's end of trading the NASDAQ Composite (COMPX) broke below our last upward trend on our 60-minute chart and traders should be playing more defense this morning. Investors should either be writing covered calls and/or buying some defensive puts on positions they refuse to sell. MACD looks to be rolling over below the zero level and MACD and Signal show this oscillator is crossing over (MACD below Signal). This is a negative. Back on January 26th we place our "waterline" for this index at 2,686 to correlate with bond yields and the NASDAQ remains below that level since February 2. Moves lower in this index could find support at 2,500 or even lower near 2,415. Resistance is starting to build at 2,650 (38.2% retracement), 200-period MA and downward trending 50-period MA.
10-year Treasury Note YIELD Chart - 60-minute interval.
On Tuesday, the 10-year yield (TNX.X) rallied right up to our waterline at 5.2%, but the MARKET stepped in a gobbled up that yield, much like a kid in a candy store. This morning the yield is falling precipitously and this looks like a defensive move. A break below the 50.33 or 5.033% yield would tell us that the market really likes the safety and an annual yield of 5.03%.