Wednesday delivered a very narrow range day across the broader markets. Volume fell off on the to reflect the lack of movement and missing volatility. The market is taking a break today and didn’t get far. The modest gains on the market marks the 7th consecutive up day for the indexes. The VIX closed 24.86 and the TRIN at 1.21 bearish on the day. The markets close higher and the VIX closing higher is a concern for me. That is a small red flag for us to pay attention to a pullback coming in sooner rather than later. Gold closed down $6.30 to $1207.20 and oil down 11 cents at $77.04 a barrel.
The small move up still leaves the indexes just over 38.2% resistance and into 200dma and 50dma. On the daily indexes the CCI is at 100 line, RSI is around 55 for each but stochastics is 93-95 reaching that overbought territory. Banks and brokers were the weakest sectors on the day, with JPM and SCHW reporting Thursday before the opening we are seeing some jittery action on financials. Hardware and healthcare were the strongest sectors and they held up well all day. Sox closed red, despite the early boost they received from the Intel (INTC) earnings report.
Any move up will over extend the market from this point and that would leave us needing the pullback. The market tried to drop today and just was not able to deliver a fall. The ES and TF did test the daily pivots, the NQ once again missed it by a few ticks. We did not test the pivots Tuesday and the NQ was only one tick off. That leaves the weekly pivots still below us untested. Thursday with the data and earnings we should see a lot more movement than we had Wednesday. I would like to see a pullback and then find support. A gap up would be exhaustive but could fuel buyers to see that financials are doing well and boost the markets further.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 PPI, 8:30 Unemployment Claims, 8:30 Core PPI, 8:30 Empire State Manufacturing Index, 9:15 Industrial Production m/m, 10:00 Fed Chairman Nomination vote, 10:00 Philly Fed Manufacturing Index, 10:30 Natural Gas Storage, Tentative Treasury Currency Report. Friday 8:30 Core CPI, 8:30 CPI, 9:00 TIC Long Term Purchase, 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market SCHW, FCS, JPM, MTG, NVS, PPG and after the bell AMD, GOOG, JBHT, PLCM, NCTY. Friday pre market BAC, C, GE, MAT, and nothing after the bell.
ES (S&P 500 e-mini) Thursday’s pivot 1090, weekly pivot 1050. Intraday support: 1089, 1085.25-1084.75, 1081.25, 1077.75-1076.50 fills gap, 1072.75. Resistance: 1092, 1102.50-1104, 1108, 1112.75, 1115.75.
