Thursday showed continuation of Wednesday’s move higher to put yet another set of new highs on the year. The volume was split with the NYSE coming in heavier and the Nasdaq came in lower, futures were also lower on the day. The range was narrow to digest Wednesday’s big advance. The TRIN closed at 1.19 bearish on the day and the VIX closed at 15.89. Gold closed down $5.60 to $1154 an ounce and oil closed down 33 cents to $85.51 a barrel.
The move higher, although modest brought the market to higher levels of overbought conditions. The resistance levels overhead to watch for are: Nas Composite has 78.6% 2519.97, the SPX 1228.74 61.8%, RUT 746.62 78.6% and the Dow 11245.90 nearing. COMPX, NDX, SPX and RUT have the RSI over 82, stochastics over 95 and outside the upper BB on the daily charts. The Dow the RSI is 76, into upper BB and 95 stochastics, also overdone but not as much as the other indexes. This upward move has continued to climb slowly with these slow moves like we had today. Wednesday was the largest advance we’ve seen in about 3 weeks. Otherwise the range has been tiny and virtually no pullbacks. The retail crowd sitting on the sidelines for that pullback is becoming impatient. The earnings starting this week left hope we would see some sell the news moves to help find new participation out of the retail crowd.
Financials lagged today, likely to have been the anticipation of BAC and even GE Friday morning. After the bell Thursday we heard from GOOG, AMD both trading down in the afterhours. GOOG beat on EPS and revs but traded down to $563.50 in the afterhours off the $595.51 close. Google doesn’t give forward guidance usually and I don’t see anything in the afterhours call. AMD (Advanced Micro Devices) beat on EPS and revs, but expect a lighter Q2 and traded down to $9.55 after closing at $10.17. Futures had a negative reaction, keep in mind Google is a top five stock in the Nas 100 and the market is overbought. A pullback will create a buying opportunity and allow for some correction.
The ES has 1210.50 and 1215.50 as resistance overhead. Support to watch will be 1194.75 and onto 1193 to fill the gap we left open this week. The NQ 2004.50 and onto 2001.25 for the gap fill for support with 2046.25 as resistance overhead. The market has early data and big earnings due on Friday morning that could change the days tone. Right now the tone is negative on futures in the globex session. An early pullback is likely to find support and get choppy so watch for the supports outlined for that support. Expiration days generally have a lot of volume, but not a lot of volatility.
Economic data for the week (underlined means more likely to be a mkt mover): Friday 8:30 Building Permits, 8:30 Housing Starts, 9:55 Prelim UofM Consumer Sentiment, 9:55 Prelim UofM Inflation Expectations. Monday CB Leading Index. Tuesday nothing due out. Wednesday 10:30 Crude Oil Inventories. Thursday 8:30 PPI, 8:30 Unemployment Claims, 8:30 Core PPI, 10:00 Existing Home Sales, 10:00 HPI, 10:30 Natural Gas. Friday 8:30 Core Durable Goods Orders, 8:30 Durable Goods Orders, 10:00 New Home Sales. Saturday IMF meetings (Greece concerns likely to be a focus).
Some earnings for the week (keep in mind companies can change last minute: Friday pre market BAC, GE, MAT and after the bell IEX.
