Tuesday closed the day on the downside, but well off the days lows. Volume increased throughout the day almost doubling Monday’s on futures and about 30% higher on the NYSE and Nasdaq. The Fed’s announcement to use mortgage-bond proceeds to buy Treasuries, which theoretically will boost the economy. The TRIN closed at 1.38 and the VIX at 22.37 a barrel. Gold closed down $2.60 to $1200 and oil fell $1.23 to $80.25 a barrel.
Futures still did not take out last weeks highs 1127.75 highs need to open for a test into 1131.25, a break there we look for 1166.75 to test. Holding over 1110.50 will hold the bulls territory and help us push higher. A move under 1100.50 will leave us to look at 1093.50 sooner rather than later. The NQ over 1919.25 we look for an advance onto 1979.50. NQ holding 1884.75 lends a hand to the bulls to run to those higher levels, a drop of 1884.75 we look for 1864.50. The weekly pivots on the ES, NQ and TF did test today. Only the ES tested the daily pivot, leaving the NQ and TF no daily pivot on Monday and Tuesday.
Wednesday starts the day with economic data, which should provide us with some volatility. At 2:00 we will get a look at the Federal Budget and that will also be a market mover. The end of day rally recovered a lot of losses, however I am still skeptical and Tuesday’s distribution day can lead the market lower. A weaker opening will not be surprising if the data comes in weak. A pick up of volume on the downside with the breadth Tuesday brought could really open the bears den. Until we take out last weeks high, I am still leaning lower.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 8:30 Trade Balance, 10:30 Crude Oil Inventories, 2:00 Federal Budget Balance. Thursday 8:30 Unemployment Claims, 8:30 Import Prices, 10:00 FOMC Member Duke Speaks, 10:30 Natural Gas Storage. Friday 8:30 Core CPI, 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 CPI, 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations, 10:00 Business Inventories, 11:30 FOMC Member Hoenig Speaks.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market CSC, M, and after the bell CSCO, PAAS, SLW, TK. Thursday pre market EAT, KSS, PRGO, WEN and after the bell ADSK, BBI, JWN, NVDA, TRMA. Friday pre market ADES, CTFO, JCP, and nothing after the bell.
