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IRA EPSTEIN & COMPANY
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(November 19, 1997) STOCK INDEXES: THE S&P 500 STOCKS INDEX–Tokyo's Nikkei index of 225 selected issues closed up 462.42 at 10,419.75 which prompted a rally in the U.S. markets, as well as the December S&P contract. Stocks in Japan were supported on rumors that the Japanese Government would support financially troubled banks.
December S&P 500 futures hit a high of 954.20 and a low of 931.80. The Dow Jones Industrial Average hit a high of 7738.49 and a low of 7575.67 while its December futures contract hit a high of 7755 and a low of 7665.
It seems the market has already factored in all the “bad news” from the overseas markets and now that a turn around in the Asian markets is a possibility, a close above 950.00 (December S&P), in my opinion, will set the stage for higher prices. The next target for the December S&P contract is the 955.00 level and this appears to be a possibility after today's strong move up.
The key resistance level for the Dow Jones Industrial Average to overcome is the 7700.00 mark, the level this market was at before the September/October rally. In my opinion, any close above this mark would set the stage for further gains.
I recommend looking for buying opportunities in the December S&P contract or I think an appropriate strategy could be a bullish position with the use of call options on the S&P 500 or the Dow Jones futures.
Bob Gulley
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