Monday erased two of the three down days last week and left the market finishing just off its highs. Volume lacked today, very light on the NYSE, Nasdaq and futures. It is Yom Kippur a Jewish holiday, leaving the market a little lackluster in participation. The VIX closed at 24.88 and the TRIN at .60 bullish. Gold finished the day up $3.00 to $994.60 and oil up 87 cents to $66.89 a barrel.
Monday’s gap and go day worked itself into overbought conditions and a lot of divergence. Then during late lunch the market started to correct itself and correct the overbought conditions and divergence. The pace was excruciating and certainly showed the lack of participation. Leaving Monday as a nice retracement off last weeks fall and now sets the week for a move to come. Each index retraced to 61.8% on the drop we had last week, this is a key resistance and one we’ll watch into Tuesday — SPX 1065.26, COMPX 2136.24, NDX 1730.40 and Dow 9812.50. Key support for Nasdaq Composite 2076.76 38.2%, Nas 100 1681.43 38.2%, S&P 500 1041.32 38.2%, Dow 9585.46 50% is still on tap for us to watch.
Retracement into Monday’s range to retest support is very likely given the light volume we went up on and the heavy volume we came down on last week. A shallow retracement is not out of the question to see the market move forward though, so look at those 61.8% as a guide. Getting through those levels is likely to ignite the dip buyers and push the market into last weeks highs.
Futures did not get the daily pivot on the NQ or TF, but the ES did. Each did test the weekly though, so we’ve cleared that up already. Es over 1060.75 look for 1075.75. ES under 1045.75 we look to retest that 1041.75 key level. NQ 1728.75 resistance and onto 1753.25, NQ support at 1688 is likely to test if the NQ fails at 1728.75. TF 612.30 and onto 624.20 for resistance and under for support 595.50.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday pre market 9:00 S&P/CS Composite 20 HPI, 10:00 CB Consumer Confidence. Wednesday 8:15 ADP NonFarm Employment Change, 8:30 Final GDP, 9:45 Chicago PMI, 10:30 Crude Oil Inventories, 10:30 FOMC Member Lockhart speaks, 12:30 FOMC Member Kohn Speaks. Thursday 7:30 Challenger Job Cuts, 8:30 Unemployment Claims, 8:30 Core PCE Price Index, 8:30 Personal Spending, 8:30 Personal Income, 10:00 ISM Manufacturing, 10:00 Pending Home Sales, 10:00 Construction Spending m/m, 10:00 ISM Manufacturing Prices, 10:30 Natural Gas, All day vehicle sales. Friday 8:30 NonFarm Employment Change, 8:30 Unemployment Change, 8:30 Unemployment Rate, 8:30 Average Hourly Earnings, 10:00 Factory Orders.
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market WAG and after the bell DRI, JBL, NKE. Wednesday pre market PBG and after the bell LWSN, XRTX. Thursday pre market STZ, TSCM and after the bell ACN, MU, SMSC. Friday nothing of interest.
ES (S&P 500 e-mini) Tuesday’s pivot 1054.75, weekly pivot 1051. Intraday support: 1051.50, 1048.50, 1045.75, 1041.75-1041.25 fills gap, 1036.25. Resistance: 1060.75, 1064.25, 1067.50, 1075.75
