Thursday closed the shortened week out on the red side on lighter volume. The lightest day of the week on the NYSE and Nasdaq. The week closed red and now sits in the lower end of the five week range. The TRIN closed at 3.01 along with a very weak A/D and U/D lines to leave the bears in charge. Gold closed down $10.80 at $930.50 and oil closed down $2.58 at $66.73 a barrel. The VIX moved back to the 10dma and 20dema closing at 27.95.
The Nasdaq composite still sits under 1875.19 38.2% fib resistance after five weeks of hovering just under it. The daily closed with sell signals and the 65 minute sits in a possible bear flag. The Nas 100 sits under 1498.36 38.2% fib resistance, 65 minute in a possible bear flag and the daily with a sell signal off Thursday’s weak action. S&P 500 closed under the 50dma and just over the 200dma (887.90) with the 65 minute in a possible bear flag and the weekly on the tilt to the bears with a test of the lows on the 5 week range. The Dow closed under the 200dma and 50dma with a move back to the low of the last 9 weeks and now lagging the other indexes. Thursday’s action was weak, opening on the highs and closing on the lows for a marubozu candle. We would generally look for continuation of the direction, but the missing volume leaves some suspicion to loom on that front.
The charts are open for the bears, if we get out of the 65 minute flags the next drop can come into the market Monday. The flags are plenty long enough and anything in range past the first hour Monday isn’t likely to let the drop come in. Volume should return this week as we kick off earnings with Alcoa on Wednesday. Which will let the market focus less on economic data and more on earnings and forward thinking to the outlooks from the big companies. Monday the start maybe slow, a little hang over action from a long weekend and let the market wake up into the 10:00 ISM. If we don’t break Thursday’s low in the first hour look for retracement of the fall because of the light volume we fell under that will let the market correct itself to find the real direction. The daily and weekly charts are favoring the downside, so unless Monday rights the train, we look for a move back down.
Dow 7958, SPX 845, NDX 1333 and the COMPX 1645 for another leg down should be on your radar. If Monday fails to hold and retrace. The earnings to come will flow fast and furious after we close out this week. Watch the VIX for a move back into 30 as well.
Economic data for the week (underlined means more likely to be a mkt mover): Monday 10:00 ISM Non Manufacturing PMI, Tuesday nothing due out, Wednesday 10:30 Crude Oil Inventories, NTA Fed Credit and Liquidity Report, 12:55 FOMC Member Evans Speaks, 3:00 Consumer Credit, Thursday 8:30 Unemployment Claims, 9:00 FOMC Member Duke Speaks, 10:00 Wholesale Inventories, 10:30 Natural Gas Storage, Friday 8:30 Trade Balance, 8:30 Import Prices, 9:55 Prelim Univ Of Michigan Sentiment.
Some earnings for the week (keep in mind companies can change last minute: Monday pre market CMED and after the bell VIMC. Tuesday pre market GBX, ISCA and after the bell RT. Wednesday pre market FDO and after the bell AA (kicks off earnings for the quarter), WDFC. Thursday pre market COMS, FCSX, and after the bell INFY, LWSN, NCTY. Friday pre market PGR and nothing after the bell.
