S&P, Dow Jones, NASDAQ 100

On March 19th S&P hit the high of 1414 and since then retreated. It actually hit the important GANN angle line to the T. On Friday March 23rd it closed at 1397 after hitting 1386.87. As long as it stays above 1390 we can say it was a mild pullback. However close below 1390 could take S&P for the first support at 1375 or may be to 1370.58 (May 2011 highs). Please remember that 1375 earlier was very important resistance which S&P had hard time in conquering and it did with a bang on March 13th. If S&P closed below 1375 then the obvious support is 1350 which is its 50-day moving average.  Sometimes these important moving averages do not give support which the traders are looking for so we must know in advance where is the next support if 50-day moving average fails. So the support I see is 1334 which is the strongest support of all. However, it is 63 points below the current level.

If S&P falls then it will be 4.5% in terms of percentage which is considered as some form of correction. However if S&P closes above 1399 then it could run up to 1440 (which is the next resistance) and if it breaks 1440 then 1462 is the target which it could hit by May 2012. And then “Sell in May and Go away” may be activated. If market decides to continue moving upward then the resistance is at 1550 – 1565 (the highs of October 2007 and March 2000). After this the target is 1625 which it may reach by November 2012 who knows what will happen. Only God knows.

Dow Jones currently facing tough resistance on monthly basis. It hit a high of 13289 and pulled back to 13002 and closed at 13080 on Friday March 23rd. Currently Dow Jones is sitting at 200 day moving average. It must rise and conquer 13166 for us to say it has started its upward journey again. The target would be 14,000 with minor resistances at 13,212, 13282.

In case Dow Jones pulls back then obvious support below is the 50-day moving average which is at 12,874. As mentioned before equity or indexes do dip below their important moving averages only to find support below these averages and rebound upward and close above moving averages. Therefore, one must know in advance what is the next support below 50-day moving average. In case of Dow Jones it is 12812-12,775.

NASDAQ 100 hit the high of 2752 and retreated. But compared to other indexes it is still looking far better – courtesy of AAPL probably. On Friday it bounced off support and now it must cross 2755 and heads upward. The support below is 2690-2695. In my earlier post I mentioned that if NASDAQ 100 closes above 2745 by March 31st then it will activate the target of 2915. This is still valid. So we will see where NASDAQ will close on March 31st.

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