Obviously, the employment report will be the focus on Thursday, and will hold sway in the price action, but historically, the odds favor higher prices again.
The Street is expecting non-farm payrolls to be flat, so any increase is going to be a positive for equity prices.
The unemployment rate is expected to inch up 0.1% to 6.2% but this should not be a negative factor unless the number reported is huge.
Here are some historical observations based on S&P 500 prices and NYSE total trading volume for the years 1958 to 2002. I looked at only the last trading day before the Independence Day holiday.
The S&P 500 closed higher 29 out of 45 times, 64% of the time.
If you averaged all of the performances (winners and losers), the average was a gain of .21%.
Volume for the day averaged about .8 to .9 times the 50-day
moving average of volume, which for this market would mean total trading volume on the day of about 1.16 billion to 1.31 billion.
There were only 8 times that the index managed to have a close which moved 1% or more in either direction.
The biggest closing loss occurred in 1991 with a loss of 1.10%.
The biggest closing gain occurred in 1980 with a gain of 1.54%.
Here is something which I found very interesting: We have just finished a second quarter in which the S&P 500 gained more than 10%. There were four other June ending quarters with gains in the S&P 500 of more than 10%; they occurred in 1968, 1975, 1980, and 1997. If you look at the last day of trading before the holiday for these dates, the S&P 500 gained every single time, and three of these occasions were gains of over 1%. The gains were: 1968, +1.17%; 1975, +0.19%; 1980, +1.54%; and 1997, +1.43%.
Resistance: The S&P 500 has immediate intraday
resistance at 984-995 and 993-1003, which makes 993-995 an especially thick area of resistance. Next resistance is 1010-1015.12. The bigger picture of resistance, which was established by price action in June, 2002, is that the S&P 500 has a band of resistance at 1008-1041, with a focus of 1020-1031.
The Nasdaq has immediate resistance at 1660-1711, then 1722-1748.
Support: The Nasdaq has
support at 1666-1641, then 1633-1621; stacked support is 1617-1598.92, then 1603-1584, making 1603-1598.92 a focus.
Immediate intraday support for the S&P 500 is a small shelf at 990-984.80. Supports are stacked, with the next support at 982-972. Additional support is 970-960. There is a broad band of support at 973-947.
Longer-term support for the S&P 500 is 948-927, for the Nasdaq, 1558-1478. Cherney is chief market analyst for Standard & Poor's