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Market Updates

S&P 500 yet to reverse 3-boxes

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It is a joyous day for bullish traders, but we need to keep our heads. From the "institutional perspective" there has been little movement for stocks. That's right! The S&P 500 point and figure chart is still in a column of O's and needs to trade the 1,240 level to get back into a column of X's and needs to trade 1,250 to erase the bearish price objective that still stands of 1,130. I'm not an "eternal bear," but I am a realist that wants to make sure we're all assessing risk/reward and thinking straight.

S&P 500 Index - $10 box

There are a lot of good things taking place in the markets today, but we still need to remain disciplines. I like the FACT that the SPX looks to be holding its bullish support trend and looks to have firmed at a triple bottom of 1,210. We still need to see a reversal to the 1,240 level to indicate that demand is beginning to outstrip supply. A trade at 1,250 is needed to get the SPX back on a "buy signal." As you can see... there's still some work to be done. Stay disciplined and don't lose your head!

Jeff Bailey

Microsoft Open for Trading

Shares of Microsoft are once again available for trading, and are trading at $73.65, up $2.56 on the day. The Dow and Nasdaq are basically unchanged from where they stood before Microsoft started trading again.

Nasdaq Composite 60-Minute/Daily Charts

Starting with the 60-minute chart, we can see that the Nasdaq Composite has completed a cup with handle position by gapping up today. It has also formed an island reversal by gapping down on 6/14/01 and then gapping up today, leaving a cluster of bars below the gaps that look like an island. The Nasdaq had moved above the 200-period moving average, but looks like it might have trouble closing above that level. If we switch to the daily chart, the 50-day moving average was holding back the Nasdaq, but has since moved above that line. We'll find out tomorrow if the Microsoft news, end of quarter window dressing, and asset allocation can spur enough buying to push the Nasdaq to 2,200.

Jeffrey Canavan
Assistant Analyst

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