Thursday dropped the market on the single biggest move in a day since September 1st, volume split although the price action was very decisive. The NYSE was higher volume and the Nasdaq along with futures was lower. Futures were BARELY lighter than Wednesday. Two big days of volume is a sign of a lot of participation. The TRIN closed very high at 3.63, the high on the day was 3.81. The VIX closed up 2.66 at 28.27 a range we haven’t seen since September 3rd. Gold closed down $8.90 at $1000.40 and oil up 12 cents to $70.73 a barrel.
This drop brought the market back to levels we haven’t seen since 9/10 and left us starting to look for the 50dma. The Nasdaq Composite has 50dma at 2031.81 and 38.2% at 1999.37 for key support levels. Nasdaq 100 1646.19 50dma and 1617.15 38.2% support. S&P 500 has the 50dma at 1020.72 and 999.61 38.2%. The Dow 9449.69 50dma and 9218.62 38.2% below that. Which gives each index two key levels of support nearing. The market has needed a correction and retracing some of the lift we’ve had since July 8th swing lows to the highs at 9/23, those 38.2% levels will be a good corrective level. That would also be around 10% on each index and a gap left from 9/4. …. Im really sorry but my son has a soccer game tonight so I have to leave earlier than normal.
Intraday the drop left us oversold and with a fair amount of divergence. That generally causes a snapback move. That along with a TRIN closing over 2 (WAY OVER) will also leave us on watch for a move back up. Such extreme moves, like to retrace and digest. That does not mean the market won’t continue lower and support is below us on the 50dma’s and 38.2% is even under that on each index. It just means there should be ample opportunity to see a bounce early and then see if the market will continue the move onto support. Early data will be a market mover, so be sure you stay on your toes at the opening. The first hour is likely to be where the volatility is and after that the digestive tone may take over.
Economic data for the week (underlined means more likely to be a mkt mover): Friday 8:30 NonFarm Employment Change, 8:30 Unemployment Change, 8:30 Unemployment Rate, 8:30 Average Hourly Earnings, 10:00 Factory Orders. Monday 10:00 ISM Non Manufacturing PMI. Tuesday nothing due out. Wednesday 10:30 Crude Oil Inventory, 3:00 Consumer Credit. Thursday 8:30 Unemployment Claims, 10:00 Wholesale Inventories, 10:30 Natural Gas Storage. Friday 8:30 Trade Balance.
Some earnings for the week (keep in mind companies can change last minute: Friday nothing of interest.
ES (S&P 500 e-mini) Friday’s pivot 1033.75, weekly pivot 1051. Intraday support: 1026.25, 1021, 1018, 1015.75 9/8 swing low, 1009.25 fills 9/4 gap, 1006. Resistance: 1034, 1037.75, 1041.75, 1046, 1049.25, 1051.75, 1053.75 fills gap.
