While there a probably more technical indicators suggesting a resumption of recent weekly declines should take place soon, observations made during today's trade, right up to the close, gives me the sense of renewed bullishness into Friday's nonfarm payroll numbers.
Friday's nonfarm payroll number, where for the most part the number of job gains has been well shy of what many economists and even some Federal Reserve Governors have been looking for in recent months, seems to be creating an atmosphere of upbeat enthusiasm among market participants, enthusiasm, or hope, that you'd be hard pressed to find in many gaming parlors ahead of this weekend's NCAA Basketball finale, let alone the widely followed "Frozen Four," where the underdog University of Denver Pioneers march toward the NCAA Hockey Championship after beating North Dakota on Saturday.
What does any of this have to do with the stock market?
Despite modes gains in today's trade, there seems to be a renewed sense that the correction is over, and a turning point is at hand.
Not everyone has been glued to their TV sets during the NCAA tournaments, but there are games when one team looks to be well on their way to victory, when at some definitive point in the game, the "loosing team's fans" sense they might be able to snatch victor from the hands of defeat.
NASAQ Composite (COMPX) Daily Intervals
Good gravy! What are YOU doing back here at 2,000 and just 3- points away from breakeven on the year? You were supposed to just go way, fade into the sunset when the NASDAQ Composite Bullish % ($BPCOMPQ) finally turned "bear confirmed." While there's work to be done at that downward trend and falling 50-day SMA, the ability for the NASDAQ Composite to reclaim the 2,000 level may have some bears saying.... "it isn't over till its over!"
Market Snapshot / Internals - 03/30/04 Close
The recently resurgent Semiconductors (SOX.X) 487.03 -0.11% showed some sign of starting to resume weakness after scrapping back from their recent lows 453, and brief violation of their rising 200-day SMA (465.79) last week. At 01:00 PM EST, SOX.X and NASDAQ bulls looked to be setting up for defeat as the A/D line went negative, but a renewed sense of bullishness took hold late in the session, with the major indices closing at their highs by the close.
What took the Dow Industrials (INDU) 10,381.70 +0.50% nearly 5.5 hours to do (gain 28 points) by 03:00 PM EST was nearly doubled in the final hour of trade, and as if followed from script, Caterpillar (NYSE:CAT) $80.00 +0.65% mustered enough strength to see a reversing point and figure buy signal buy the close, with a session high trade of $80.04.
Pivot Analysis Matrix -
For an SPX/OEX trader, my end of session observation would be that today's highs and lows, and perhaps tomorrow's are currently bound by BIX.X support at WEEKLY R1, and SPY resistance at MONTHLY S1. For two straight sessions, the OEX has dipped below its WEEKLY R1 of 549.93 (just before yesterday's close) and then again today, just before 01:00, where for no news that I could find, a renewed sense of bullish enthusiasm was found and trader's in New York returned from lunch.
NASDAQ-100 Heatmap - 03/30/04 Close (www.nasdaq.com)
Breadth for the NASDAQ-100 Index (NDX.X) 1,445.25 +0.2% and its Tracking Stocks (AMEX:QQQ) $35.91 +0.33% was positive at 65:35, but among the 6-most heavily weighted components, only Cisco Systems (NASDAQ:CSCO) $23.93 +0.33%, which is staring at a curling lower 50-day SMA ($24.20) was able to muster a gain in today's trade.
Marvel Technology (NASDAQ:MRVL) $45.19 +4.77% was today's NDX/QQQ percentage gainer, and after giving a reversing lower point and figure sell signal at $40.00 (and testing its rising 200-day SMA), MRVL's shares have rallied back and threaten to challenge a 52-week high of $46.63 set on November 4, 2004, where a trade at $47, would have MRVL's PnF chart back on a buy signal. While not a "key stock" or heavyweight in the NDX/QQQ, MRVL is a good stock for all NDX/QQQ traders to keep an eye on, as just one stock to try and get a feel for some of the internals at the NDX/QQQ.
In PINK, I've squared the six-most heavily weighted components for the NDX/QQQ, which aside from CSCO showed little sign of bullish enthusiasm from bulls. "Value" investors may be scratching their heads when they see Yahoo! Inc. (YHOO) +2.31% and eBay Inc. (NASDAQ:EBAY) +2.12% not only among NDX/QQQ percentage gainers, but closing in on new highs.
It is IMPOSSIBLE to follow a lot of stocks closely, but as I look at stocks like CAT and now MRVL on their point and figure charts, there seems to be enough looming demand, when even as many indicators might suggest a resumptions of selling, I can only think this Friday's nonfarm payroll data still has bulls sticking around to see what Friday's nonfarm payroll data has in store.
I mention much of the above, mostly as it relates to the BEARISH side of me (my trade weighted philosophy right now would be 60% BEARISH and 40% BULLISH) NOT liking some of the bullish observations, or lacking of follow through BEARISHness.
Much of this centers around what I've seen in the bullish % indicators of late, where despite internals weakening, the recent rebound, which may be anticipatory ahead of Friday's nonfarm data, should be a bit unnerving, or of concern to bears.
NASDAQ-100 Tracking Stock (QQQ) - 15-minute intervals
I thought I'd take a look at the 15-minute interval chart, which gives us a chance to look at the QQQ on somewhat of an intra-day basis, but also allows for several days of observation. I've marked the various major MONTHLY and WEEKLY pivot analysis levels for the QQQ, where today's close comes above WEEKLY R1, which in my opinion, takes some bullish enthusiasm, if not lack of selling.
The downward trend you see at the top of the chart, at WKLY R2, that certainly looks to be "in play" right now, where the only levels of pivot matrix resistance would come from the DAILY Pivots.
The WKLY and MONTHLY levels should be finding more resistance selling in my opinion, and I'd have to say that they aren't. Almost as if the big players are willing to play a wait and see game into Friday's nonfarm data.
While we can see today's low in the QQQ found buyers at what would have been Friday's congestion high, it was also somewhat correlative to Tuesday's DAILY S1.
S&P 100 Index Chart (OEX.X) - 15-minute Intervals
While support for the QQQ may have come at its DAILY S1 in today's trade (Tuesday), I'm starting to see some action in the OEX, where the MONTHLY S2, which found little resistance selling on Monday, starts to look like a level of support, where when traded, turns on the computers for buying, as if the zone between 549.26 and WEEKLY R1 549.93, which are very close to March's Triple Witch expiration "Max Pain" of 550.00 have become less significant all of a sudden. S&P 500 Index (SPX.X) 1,127.00 +0.40% can perhaps make a similar observation, with 1,125.00, which was March's Triple Witch expiration.
Dow Industrials Chart (INDU) - 15-minute intervals
Not all that unlike the intra-day 15-minute chart of the OEX, we see some Monday and Tuesday pullback low buying when the INDU has traded, then fallen below its WEEKLY R1 of 10,320. I placed a "whack!" and "smack" annotation at the MONTHLY S2, where that was an obvious "sell" point into the weekend, but either had no sell programs lined up for Monday, or buyers were too strong as if a renewed sense of bullish enthusiasm was taking hold into Friday's nonfarm payroll numbers.