Equity Index Update (Special Edition)

Brad Sullivan

Editor's Note: Brad Sullivan's Morning Commentary is usually posted in our SuperPlatinum Virtual Trading Room around 0845 CST.


The index markets are called to open higher as the market attempts to follow through on yesterday’s strong reversal. The SPH is trading at 1366, + 7.00 on the session. The real strength this morning lies in the NQH futures which are trading higher by +1% at 1807. Strength in the technology sector is being led by RIMM (Research In Motion) which updated guidance this morning and is trading higher by +12pts to 109.50. In addition, CSCO (Cisco) was upgraded in a research note and is higher by +2% in the premarket.

Today’s session should hinge on whether or not buyers step up at higher levels. Yesterday’s action was quite constructive for the buyside as sellers could not generate any selling below key support zones. Will the buyers step up today? Certainly the table is set.

I have enclosed 3 charts showing that show some interesting situations in the near term.

Equity Index Update (Special Edition)

Brad Sullivan

Editor's Note: Brad Sullivan's Morning Commentary is usually posted in our SuperPlatinum Virtual Trading Room around 0845 CST.

The index markets are called to open sharply lower on the heels of aggressive selling in the far east (Nikkei and Hang Seng lower by 2 and 3% respectively) and economic data that shows some signs of inflation here at home. The SPH is trading at 1336.50, lower by -19.00 on the session. Some of this headline decline is due to the premium settlement in the futures trade yesterday. After the cash close, HPQ reported better than anticipated earnings and the SPH rallied to settle +5.50 above fair value.

Today’s session should be dominated by the key support zone built up in the SPH from 1340 to 1330. If the index were to break below this zone on a 30 minute close it is a negative that should produce a test of the 1315 zone (chart enclosed). If the market holds this zone, there is potential for short covering towards the 1350 level; however given the makeup of our current environment (4 % range) a bounce like that should be sold.

External factors in today’s session will be the commodity market, specifically the energy complex. Yesterday, front month Crude Oil traded over $100 per barrel and seemed to trigger selling in the equity indices. Clearly any sustained trade above par is not helpful to the equity market and could be the trigger for a larger move. Conversely if Crude were to come off towards 98 it may be supportive in the shortest of time frames for equity traders.

I have enclosed 3 charts today…the first being a all session SP futures chart since Feb 1st on a 30 m inute basis. The second being a daily NDX 100 chart from the 2006 bottom and last a comparison chart of GS and the SPX.

Timer Digest Market Commentary

Fari Hamzei


We again reiterate our position: SELL SHORT & HOLD...

Here is why:

Sub-prime writedowns continue to resurface by the "usual suspects" announcing on both sides of the Pond (CONUS and Western Europe). The Three Amigos' hands (Uncle Ben, Comrade Paulson & Chris Cox) are all but tied behind their backs. They can no longer drop FF rate unilaterally as depicted by recent rise in Gold and Crude Oil spot/forward prices. With UofMich Senti at 16-yr lows due to high energy prices, falling home prices and credit concerns, consumers continue to worsen their sentiment and economic outlook. And now the inflation expectations component is edging back up.


Editors' note: This was sent to Timer Digest about 01:32 CST today.