Wednesday recovered Tuesday’s losses and did so on light volume. Once again we miss the participation level for confirmation on a reversal despite the day leaving an engulfing candle. Dow closed +.19 %, SPX +.32%, COMPX +.83%, NDX +.87% and RUT +1.55% on the day. The TRIN closed at 1.14 near the days lows and the A/D and U/D closed on the days highs. The VIX moved from 28.92 highs to close at 26.70 just off the days low. Gold closed up $6.60 to $1240 and oil closed up 89 cents to $72.52 a barrel.
The day was really slow and didn’t take hold until financials finally came in for some buying, late day seemed to be pushed by shorts doing some covering. After 5 days down it was time for a little upside, but remember it was on light volume. The support I outlined last night is still in place so keep it handy. The Nas composite fell into 2113.88 78.6% fib support, NDX 1764.13 70.7%, SPX 1045.56 70.7%, and the Dow 10036 61.8% fib support. I don’t look at 70.7% as a key fib level, so the SPX and the NDX can still move onto 78.6% 1036.23 SPX and 1746.85 78.6% as key levels.
The ES closed over 1054.75 and we still have 1058 resistance to clear before the bulls can run. The NQ has 1795.50 and the TF 604.30 and onto 611.20 for a key area to clear. The futures did test the pivots today and tomorrow we look for the 1050 ES, 1782.50 NQ and TF 598.80 to test as well. I liked the run we had today but it was more of an oversold bounce because of the missing volume. Until we see a day with volume it is hard not to be suspect of the upside. Early strength tomorrow will be key to see buyers stay around, without it this maybe a one day wonder of a lift.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 Unemployment Claims, 10:00 Mortgage Delinquencies, 10:30 Natural Gas Storage. Friday 8:30 Prelim GDP, 8:30 Prelim GDP Price Index, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations, 10:00 Fed Chairman Bernanke Speaks.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market DHT, FRED, PDCO and after the bell DLLR, JCG, NOVL, OVTI. Friday pre market FRO, TIF and nothing after the bell.
