S&P 500 Index and Big 10 Weekly Outlook - March 26th

The market drove me absolutely BATTY this week. Early in the week, the S&P 500 index cleared 1400 and I bought the weekly 1500 calls and they expired worthless. Then on Friday, the index breached my sell signal (1384.25) for a second time, and I loaded up on the weekly 1300 puts with the same result. Instead of the market breaking down, it took off like a BAT out of hell and the index ended down a modest 10 handles for the week. Now that the correction is over, I may be more conservative this week and purchase the weekly 1450 calls. All kidding aside, this market will not go down. Whether it be institutions or large investors trying to get in, or the High Frequency Traders sub-pennying any 1000 share bid from the bloodied short selling crowd, no break can hold. And this scenario will continue until the June S&P 500 Index can break and close below 1380.00. The only hint of a temporary top is the index's refusal to settle above 1400.00 on more than one occasion. Exxon Mobil

teased momentum traders once again this week. Finally, it cleared out the institutional size at 87.00 and crept up to 87.18. However, it was not able to close above 87.00 and succumbed to selling pressure the remainder of the week. Between 85-87 is going to be a crapshoot this week. But once XOM can make up its mind, it will be going to 83.00 or 89.00 in a hurry (in this current environment that could be a month). The biggest news on Apple

this week was that the price DID NOT trade at 542.00 (in case you missed it on CNBC). Boy was I glad, I thought that was going to be where my 578.00 sell stop to get short was going to be executed. As a result of Friday's miniscule $7.40 range (not including the print on the BATS exchange), Monday's action should be a good indication for the remainder of the week. If AAPL can clear 601.80 prepare for a new all time high, again. On the other hand, a break below 594.40 may lead to a test of major support at 578.00. Long term investors should move their sell stops to 589.99, since there is no support whatsoever for APPL in the 580 handle. International Business Machines

hardly moved this week. And for a $200.00 stock to trade in less than a 3 point range for an entire week is rare. As discussed last week, 206.01 (last Friday's triple witch expiration close) is the level to focus on for both long and short term investors. Although it traded up to 206.53 on Monday, IBM did not have one close above 206.00. Furthermore, Wednesday-Friday's highs were between 205.77-205.99 (no such thing as a quadruple top). If IBM can manage a few closes above 206.00, 207.52 will end up being the former all time high. As well as the resistance is defined in this issue, so is the support. Last week's low of 203.70 is pennies away from the eight day low of 203.64. Long term investors that do not want to regret not selling IBM above 200.00, place your sell-stop at 203.50 (hopefully your firm will not ship it to the BATS exchange, if it is open). Chevron Corporation

followed through on the pattern discussed last week. After making a new 52 week high on the two previous occasions CVX responded with a substantial pullback. Once again, it did not disappoint short sellers. In the last four trading sessions, CVX managed to wipe out over half it's gain since mid-December. Although 105.00 has halted the decline, below that level look for 102.00 to be the next major support level. Above 107.00 would ignite some short covering for those participants who were not savvy enough to enter bids (small ones) during the rapid decline. Microsoft

is winding up for its next move. After rallying substantially above the April 2008 high, MSFT had a healthy pullback this week. It has found excellent support from 31.72-31.84, the lows of the week from the last four trading sessions. That coupled with the last four closes between 31.99-32.01 provides for a low risk entry to re-enter long positions. If one wants to wait for a break-out to enter, 32.15 would be the level, since the last four highs for MSFT have been between 32.09-32.15. General Electric

made a solid attempt to make 20.00 major support instead of major resistance. In fact, GE closed above 20.00 on five consecutive trading days before collapsing. Also, GE is still well off the 52 week high of 20.85. After making a new high for the move on Monday at 20.36, the upward momentum faded (similar to the overall market). Expect 20.00 to keep a lid on the rally for now and 20.30-20.36 to be littered with huge offers. For the bottom pickers in the crowd, the double bottom at 19.69-19.70 should be excellent support. Procter&Gamble

is the top candidate of the Big 10 for a Channelingstocks.com advertisement. From Monday-Wednesday, PG produced almost identical ranges and close. Finally, on Thursday it tested the lower boundary again and then exploded (for PG that is). However, this issue was unable to make a new 52 week high as the High Frequency Traders began to feast on the gigantic sell orders at 68.00. Until that level is taken out, PG is destined to trade in a one point range. The four consecutive low's 66.86-66.96 should curtail any selloff as the longer term HFT players reel in their profits. Hooray for AT&T

as this issue finally made a new 52 week high at 31.97. The pre run-up into the ex-dividend date is in full bloom. Expect 31.97-32.00 to be major resistance as some profit-taking occurs and the HFT crowd squeezes out profits trading ahead of the institutional size at 32.00. Only word of caution would be the pattern of three lower highs and three lower lows Wednesday-Friday. Nevertheless, expect the tug of war between dividend players and the HFT contingency to continue unless 32.00 is taken out. Johnson&Johnson

would be the second candidate of the Big 10 for a Channelingstocks.com advertisement. Although the daily ranges are not as well defined as PG, the end result is the same. Two, three or four high or lows within a dime, those levels are breached and within the next few days a new range develops. Thus, 64.37-64.40 will be support and 64.69-64.71 will be resistance, until JNJ decides to establish a new .30-.40 range, making the former numbers either support or resistance. Someday, I do not know when, JNJ will either trader 63.99 or 66.01. As 20.00 is to GE, so is 22.00 to Pfizer

. Although PFE has managed to close above 22.00 only one time in the last several trading sessions. With 21.96-22.00 holding in four of the last five trading sessions, 22.10 being the six day high and 22.17 being a multi-year high, what else can PFE do but go down. Just kidding. Play the 21.70-22.00 range until PFE can sustain one or the other on a closing basis (and still-who knows?). If PFE maintains 22.00, it should able to take out the 52 week high. On the other hand, below 21.70 PFE will drift down to the lower end of the month long trading range of 21.00-22.00. In closing, the paltry 30.00-40.00 point weekly ranges in the S&P 500 Index seem destined to continue. The breaks are so well bid with short covering, new money, companies buying back their own stock and HFT players sub-pennying all of them. Support keeps moving up in the market. On the other hand, rallies are greeted with some profit taking (only to be reinvested in another sector) and short sellers that are a glutton for punishment. Therefore, last week's high (1408.00) and last week's low (1380.50) in the June S&P 500 Index futures will be important levels to follow for a preview of the next major move in the market.