Thursday left the broader markets green, but on the days lows. A nice gap and go day provided some cushion on the move, but didn’t hold the gains. Volume came in higher than yesterday’s on the NYSE and Nasdaq, leaving the market with an accumulation day. Futures are still fluctuating and came in modestly lighter than yesterday. The TRIN closed bearish at 1.62 and the VIX at 25.34. Gold closed the day up $7.00 at $934.20 and oil up $3.65 at $67.00 a barrel.
Thursday was the first day we’ve seen the HOD at 10:40, usually we make new highs throughout the day on this lift we’ve seen for the past three weeks. That was the first tone change, the sell off in the final hour was definitely another change. The mid day reversals have been off the lows and runs to the bell, today that was a reversal into the lows of the day. The Daily chart left shooting stars on the day. That leaves the highs as a big resistance point on the chart. If Friday closes lower that also confirms the reversal candle and lets the market pull in.
Some of the late day drop was from nervousness ahead of the Friday GDP number. That is very likely to set the days tone for us. The market has had a huge lift and the word overbought doesn’t even have meaning any longer. The market went sideways for five days and gapped out of the range on the opening, still closed the Nasdaq over the top of the prior range, the SPX and Dow pulled back within the range. The Dow had a big day trading up to 9246 intraday and closed at 9154. This was the highest close since November 4, 2008 on the SPX and Dow. The Nasdaq Composite had it highest close since October 1, 2008 and the Nas 100 the highest close since September 26, 2008.
Friday look for a retracement of Thursday’s drop, the bulls won’t walk away that easily! Then we can look for a retest of the lows and even a gap fill on the Nasdaq that was left open. Futures left even bigger gaps open and that will be support. Friday closes July out and isn’t likely to get in a hurry to expand the range in the afternoon. A slow start is also likely with 9:45 data that generally stalls the market until the release.
Economic data for the week (underlined means more likely to be a mkt mover): Friday 8:30 Advance GDP, 8:30 Advanced GDP, 8:30 Employment Cost Index, 9:45 Chicago PMI. Monday 10:00 ISM Manufacturing PMI, 10:00 Construction Spending, 10:00 ISM Manufacturing Prices, Vehicle sales all day,
Some earnings for the week (keep in mind companies can change last minute: Friday pre market AEP, D, TOT, WY and nothing after the bell. Monday pre market CLX, MRO, MGM, TSN and after the bell CTX, MSTR, PHM
