Tuesday the day closed with only the Dow green, Dow +.06%, NDX -.01%, SPX -.25%, COMPX -.27% and RUT -.79%. Pretty neutral close with modest change overall and volume came in higher on the day for a distribution day on everything accept the Dow which is an accumulation day. The market has closed up 12 of the last 16, so one tiny down day isn’t a big mark. The TRIN closed at 1.23 and the VIX at 22.35 sitting on top of the 10dma and has closed under the 200dma for the 10th consecutive day. Gold fell $6.80 to $1274 an ounce and oil down $1.25 to $74.94 a barrel.
The key levels I outlined last night is still in place. The Nasdaq composite closed just under 61.8% 2354.16 resistance, NDX just over 1982.51 78.6% (for the 2nd day), SPX just under 1140 61.8% and the Dow is just shy of 10776.40 70.7% resistance. Which leaves us still pausing under key resistance. The day started weak and saw a nice pop off the Fed’s announcement, the market then fell into the bell to give up the Fed gains. Most of September has been tight, low volume upside movement and now we have the Fed out of the way, expiration last week and now to focus on the next 7 days holding the months gains. On that note, the week after expiration has been down 6 of the last 7. Keep that in mind as we get through the rest of the week.
The day closed with a spinning top for more indecision and still has some bearish overtones with this resistance holding us from moving higher. A retracement here would not hurt anything we have RSI over 70, stochastics are flat but in the mid 90’s and the CCI is holding just over 100 line. Not showing a lot of momentum sitting that flat and off extremes. Futures have not tested the weekly pivots and today only the ES did test the daily. Which leaves the NQ not testing the daily for two days, the TF only did a daily test on Monday. I would expect the NQ to be drawn to the pivot on Wednesday and some rotation down into S1 levels from there.
With Wednesday being a light economic data day and following the fed, we can look for a digestive opening. The last two days have gapped up, Wednesday may break that trend and give us a move to the downside early. The market left a gap open on Mondays gap and go move, the close on Friday will be support for any retracement. Ahead of that gap is the mid range on the impulsive move from Monday (50% of Monday’s range) for support. That would be an adequate pullback to pick up momentum, deeper would be into the gap.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 10:00 HPI m/m, 10:30 Crude Oil Inventories. Thursday 8:30 Unemployment Claims, 10:00 Existing Home Sales, 10:00 CB Leading Index, 10:30 Natural Gas Storage. Friday 8:30 Core Durable Goods Orders, 8:30 Durable Goods Orders, 9:00 FOMC Member Duke Speaks, 10:00 New Home Sales, 4:30 Fed Chairman Bernanke Speaks.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market GIS, JEF, ZLC and after the bell BBBY, HIS, SCS. Thursday pre market RAD, SCHL, TXI and after the bell FINL, NKE, TIBX. Friday pre market KBH and nothing after the bell.
NQ (Nas 100 e-mini) Wednesday’s pivot 1988, weekly pivot 1939.25. Support: 1981, 1975.25, 1969.25-1967.75, 1961, 1957.50, 1952.75 fills gap. Resistance: 1991.75, 1995.50, 2000.25, 2006.50-2009, 2012.50-2014
