Friday closed the day red across the broader markets, leaving a red week and January closed with a loss. The volume on the NYSE and Nasdaq came in heavier than Thursday’s to leave a distribution day. Futures were slightly lighter than Thursday’s. The TRIN closed at 1.15 bearish on the NYSE and the Nasdaq at 2.05. The A/D and U/D lines closed on the lows on the NYSE and Nasdaq. The VIX closed at 24.62 still about 8.5% off the 10dma. Gold closed $1.60 to $1083.20 and oil down 76 cents to $72.88 a barrel.
Daily charts on the Nas Composite, Nas 100, S&P 500, Dow are through the lower Bollinger, stochastics at 11, RSI 33, MACD still moving lower and the ma’s are converging. The week broke the 50dma on each index week and confirmed that move. A correction is healthy for the market, remember December the market did a lot of gap and go moves on light volume. Corrective moves clear up that light volume rise and fill the open gaps. The market has been straight up since November 27th so that swing low is the support we look for now.
Nas Composite 2113.99 and into 2088.90 should be on watch for good support. Nas 100 is on the November 27th swing low and has 1704.88 just below as support. S&P 500 had Nov. 27th and December 9th swing lows and broke that support, look for 1055.14 support. The Dow also has support at 9899.58 after breaking the prior swing lows. If those levels don’t hold this correction may accelerate deeper than the bulls can stomach. The market has been a pretty one sided and now we get to see another side.
Monday look for an early bounce, a gap down could be the exhaustive move we need to see. Don’t let that scare you off if we start weak, Friday’s strong move lower throughout the day left us short term oversold and a bounce off continuation would work well for the market. Monday is also the first day of a new week and month, the last three months have had an up day for the first day. A gap up on Monday is likely to stall the market and leave us in a choppy range. The week is full of data and earnings, so look for the volatility we had last week to continue this week. Friday will holds the big card off Job’s data, so the week is likely to focus forward this week into that release.
Economic data for the week (underlined means more likely to be a mkt mover): Monday 8:30 Core PCE Price Index, 8:30 Personal Spending, 8:30 Personal Income, 10:00 ISM Manufacturing PMI, 10:00 Construction Spending, 10:00 ISM Manufacturing Prices. Tuesday 10:00 Pending Home Sales, Vehicle Sales all day. Wednesday 7:30 Challenger Job Cuts, 8:15 ADP Non Farm Employment Change, 10:00 ISM Non Manufacturing PMI, 10:30 Crude Oil Inventories. Thursday 8:30 Unemployment Claims, 8:30 Prelim Nonfarm Productivity, 8:30 Prelim Unit Labor Costs, 10:00 Factory Orders, 10:30 Natural Gas Storage. Friday 8:30 NonFarm Employment Change, 8:30 Unemployment Rate, 8:30 Average Hourly Earnings, G7 Meetings, 3:00 Consumer Credit m/m. Saturday G7 meetings continue.
Some earnings for the week (keep in mind companies can change last minute: Monday pre market XOM, HUM, SOHU, and after the bell APC, TUP. Tuesday pre market ADM, BP, COCO, CMI, DOW, DHI, HSY, KFT, LXK, MAN, MRO, SU, UTI, UPS, and after the bell ACE, AFL, JDSU, MEE, MET, NWSA, QSFT, RENT, SSD, TSO, VASC, VRSN. Wednesday pre market ATMI, CMCSA, HNT, IP, ITG, NOV, PFE, RL, R, SGP, SLAB, TWX, TZOO, and after the bell NDN, AFFX, AKAM, BBBB, CELL, BRCM, CSCO, ONNN, OHB, SSTI, SPF, STLD, THQI, V, YUM. Thursday pre market BCRX, BG, CI, CLX, CME, ITWO, K, MA, MF, PENN, PAS, SLE, SNE, HOT, and after the bell ATVI, MCHP, SUN, VARI. Friday pre market AET, BZH, BRKS, BZH, TSN, WY, YRCW and nothing after the bell.
SPX (S&P 500) closed -10.66 at 1073.87. Support: 1064.65, 1055.14, 1029.38. Resistance: 1101.71, 1113.85 50dma, 1133.57.
INDU (Dow) closed -53.13 at 10067.33. Support: 9981.03, 9899.58, 9842.88. Resistance: 10136, 10192.90, 10233.50, 10312.90
