Morning Thoughts Friday October 14

It was a fairly uneventful day in the broader U.S. equity market yesterday…in fact it has been a pretty uneventful week thus far.  I supposed after the manic volatility we’ve seen since we entered August a little calmer waters at least temporarily are to be expected at some point.  I’m not expecting it to remain this  ‘boring’ for long as the 2.5 month trading range will have to give way to higher or lower levels soon. 

Technology led yesterday’s trade while financials lagged, courtesy of some profit taking in JPMorgan (NYSE:JPM) – I raised a flag on the potential immediate-term overbought levels in financials yesterday in this column.  The lead by technology was well captured by the broader indices yesterday as the Nasdaq 100 has now rallied 13% since last week’s bottom. 

On the weekly chart the Nasdaq 100 shows great support at 2030 and resistance at 2330.  Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Amazon ((NASDAQ:AMZN) are acting well and should they be able to keep up the spirits it does look like the Nasdaq 100 might be able to power through 2330 into the second half of Q4.

The S&P 500 too remains in a wide trading range  (1100-1200) and a breakout above 1220 could move the index into 1260 for a continuation of the Q4 rally.  In the very near term a solid support level to focus on is near the flattening 50 day moving average (blue line) of around 1175.

The all important chart of the dollar index meanwhile is sneaking back down toward the breakout point from September, which will be an important area to watch for clues to equities. 

Other than that, without much going on it’s best not to overanalyze and let the tape talk to us when it has something or importance to articulate.


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