US markets power higher to important moving average resistance
It is the US nonfarm payrolls release today, always an important number for the direction of stock markets.
The E-mini S&P 500 broke above strong resistance at 2620/25 (unexpectedly if I am honest) and used this area as support at the start of this week to continue higher, reaching 2713 as I write today. Although the weekly chart below shows no important resistance, it is a slightly different story if we zoom into the daily chart.
The daily chart below shows the March futures challenging the 100-day moving average at 2710/12. So this is key resistance for bulls today. Note what a perfect job the blue 100-day moving average did as resistance in mid-October, early November and early December. A good reason to pay attention to it now!
A sustained break above 2715 targets 2720, 2723 and 2728/30. Above look for 2735/37 and strong resistance at 2741/43, from the 200-day moving average.
Failure to beat strong resistance at 2710/12 in severely overbought conditions targets 2695/92. Below 2690 look for 2682/80. We should hold support at 2675/73 on the first test, so watch for a bounce from here in the very short term.
The E-mini Dow Jones has important 100- and 200-day moving average resistance at 24980/25000. This has currently stopped the March futures dead in their tracks. Holding here targets 24900/880 before strong support at 24770/740. A bounce from here is expected on the first test at least. If we continue lower look for 24680/670 before strong support at 24590/570.
A break above 25080 today should be enough to confirm the next bullish breakout for a buy signal, targeting 25140 and 25190/199. A move above 25230 targets 25320/330 and 25370.
The Nasdaq powered up through resistance at the 100-week moving average and nine-month trendline at around 6500 in the second week of January. This week we pushed higher again, reaching 6943 on Thursday.
Although the weekly chart shows the path of least resistance is to continue higher, the daily chart shows a different story.
We see the Nasdaq March futures hitting important 100-day moving average resistance at 6920. Although we overran to 6943 on Thursday we closed below 6920.
Bulls must hold prices above 6920/15 to remain in control and of course a weekly close above here would be important. A break above 6945 targets 6962/67 and perhaps as far as 6995/99.
For today, failure to beat 6920/15 targets 6900, 6885/82 and possibly support at 6870/65. On further losses look for 6848/46 and 6840/38. Bears now have a chance to see if the downtrend is developing.
Technical Analyst & Trader
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