By Mike Paulenoff, MPTrader.com
There are two features to today's market: One is that after a very lethargic overnight session where the indices flat-lined, once the markets opened in real time there was no selling pressure that enabled the indices to follow-through on the downside after yesterday afternoon's sell-off.
The second feature is that after the bears showed that they were ineffective in the short-term, they gave up, covered their position, and the bulls took over and ran the indices to new highs for the upmove that started last week.
So those are the two main features of today. The third feature is that Greenspan gives his testimony on Capital Hill tomorrow, and nobody is being overly aggressive in either direction today with Greenspan's comments looming tomorrow.
As far as specific levels go, using the E-mini March S&P, the key level is 1148, which interestingly enough is the rally peak from the Wednesday afternoon of the last Fed meeting on January 28, right before the index plunged to 1120. In terms of micro support for the E-mini March S&P, this morning's low at 1137.50 is the other bookend. If that is broken, then the indices will be back in a negative direction.
On the other hand, if it breaks above 1148, chances are we're going to go to retest the recovery high from January 26 at 1155.
With regard to the QQQs, the Qs are in a similar situation. They showed that the bears are still relatively ineffective in pressing the index since last Wednesday's lows were established at 36.32. The bears had a chance to break 37.00 this morning but failed, gave up their position, covered, and the ensuing rally has taken the Qs to a new multi-session high at 37.41.
Key resistance, though, resides at 37.48, so you really need to get above 37.48 to generate more potent buying power that should be able to take the Qs to the 37.70 area.
Having said that, though, you have Greenspan's testimony tomorrow, and it's unlikely that the Qs will rocket into the close or on the opening tomorrow unless there's a leak of his testimony.
It's more likely the Qs will slide back into the middle of their range between 37.00 and 37.40 ahead of Greenspan's comments, and then at 11 Eastern tomorrow, when the prepared text is released, the market will lurch one way or another in reaction to those comments.