Top Takes From RealMoney

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Morning Prep

By Ken Wolff
06/02/09 8:46 a.m.

The PowerShares QQQ(QQQQ Quote) is trading down this morning after a very nice day of trading. My targets were hit yesterday as the market gave us a strong indication, moving down 20 cents to $35.60 then up to my top target of $36.50. I would not expect profit-taking, so I am attributing this gap down as nervousness...

In that case, we can move down today, but its not really predictable. I am going to expect some buying off $36 with a potential move up to $36.40, where I will be looking for shorts. That would be what would occur if we are going to see a nervous market today...

No positions

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Morning Trade

By Bob Byrne
06/02/09 9:19 a.m.

I have received a number of emails all wanting to know what slows this current advance -- and if I had to guess, I would put my chips on the energy/commodity trade. When we see the energy stocks weaken, we will likely see the broad market do the same (or at least slow down). A convenient time for a commodity reversal would be the inventory numbers released after the market today by the API and the DOE's version tomorrow morning.

The financials have the ability to cause the market to hiccup and stall, but technology and energy have been to drivers of late ... just look at the performance of the Financial Select Sector SPDR(XLF Quote)/SPDR KBW Regional Banking(KRE Quote) vs. the Energy Select SPDR(XLE Quote)/Oil Services HOLDRs(OIH Quote)/PowerShares QQQ(QQQQ Quote).

The bulls will need to defend moderate support at 937.25 and strong support at 935 if they want to make another advance towards the 950 area. The 942.75 area will be the first level of strong resistance the bulls must conquer. A sustained trade above here finds only moderate resistance at 945.50 before tackling strong resistance at 950/951.

The bears first target must be strong support at 935 ... a sustained trade under this area sets up the potential for a quick drop back to moderate support at 930 and strong support at 927. A failure by the bulls to hold the 927 area give the bears an opening to take us back to moderate support at 922.50 and strong support at 918.

No positions