Monday kicked the week off with a loss and closed with the Nasdaq being the weakest sector. The volume came in lower on the NYSE and Nasdaq while futures came in heavier. The TRIN closed neutral at .94 and the VIX at 24.88 11.5% off the 10dma. Gold closed the day down $17.20 to $1241.10 and oil up 64 cents to $77.82 a barrel.
The weak day started with an exhaustive gap that tried to hold and did a really good job for about 90 minutes. Then the tech sectors started slipping and took the market down slowly with it. Very few bounces were given once oil closed and the selling brought in volume. The big move filled the gap and took on a much bigger range than I expected for the weeks start. Futures did test the daily and weekly pivots, the ES and NQ closed back over the weekly pivot but the TF did not.
Into Tuesday we will have to look for economic data to pick up at 10 and also Treasury Secretary Geithner will speak to Congress about the TARP. That could provide the market with volatility and some insights to when the timeline for winding down the governments shares and repayments. Late day also brought in some short covering and a nice late day bounce. I will look for that to continue and see some bounce off the open. A retest of the days low would not be out of the possibilities and even retrace deeper. The selling was steady and when the Nasdaq leads it has to be looked at closely as a sign of profit taking and shorting taking place. The market lacked buyers and we saw a huge gain slip through the bulls fingers. Putting the market right back into 50% of last weeks lift. Good healthy pullback.
The ES needs to stay over 1093.50, the NQ 1863.25 and the TF 653.70 or we are likely to close the gaps left open from 6/11/10. That would erase all of last weeks move and start cutting into June’s gains a little too deep for most bulls. Seeing Monday’s low hold is likely to leave us looking for higher and a retest into the 50dma’s overhead.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday TBA Geithner Testifies on TARP, 10:00 Existing Home Sales, 10:00 HPI m/m, 10:00 Richmond Manufacturing Index. Wednesday 10:00 New Home Sales, 10:30 Crude Oil Inventories, 2:15 FOMC Statement, 2:15 Federal Funds Rate. Thursday 8:30 Core Durable Goods Orders, 8:30 Unemployment Claims, 8:30 Durable Goods Orders, 10:30 Natural Gas Storage. Friday 8:30 Final GDP, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market CCL, JEF, WAG and after the bell ADBE, JBL, RHT. Wednesday pre market RAD, SMTS and after the bell BBBY, DRI, NKE, PAYX. Thursday pre market DFS, LEN, MKC and after the bell FINL, HRB, ORCL, PALM, RIMM, SMSC. Friday pre market AZZ, KBH and nothing after the bell.
ES (S&P 500 e-mini) Tuesday’s pivot 1113.75, weekly pivot 1104. Intraday support: 1105.75, 1103.25, 1100.75, 1097, 1093.50, 1086.25 fills gap. Resistance: 1112.50, 1115.50, 1118.25, 1122.25, 1127.50, 1130, 1135.25, 1141.75
