Thursday closed the day green across the broader markets on light volume. The NYSE was the lowest volume of the week and the Nasdaq was down from Wednesday. Instead of anticipating the Intel report and moving the market sat in a narrow range to wait on the release. The VIX closed at 17.63 and the TRIN at 1.03 bearish on the day. Gold closed at $1144.50 up $7.70 and oil down 30 cents to $79.35, the fourth consecutive day of losses on oil.
The TRIN closed over 1.00 which is bearish while the market closed on its highs. With the SPX and Dow on new highs and the Nasdaq within reach of the yearly high that TRIN raises a red flag for us. The A/D line closed on the highs, telling us that more shares advanced than declined today. The U/D line closed up near the highs showing more up than down volume on the day. Both were modest moves up, but the TRIN which also measures breadth is skewed off the light volume. With that in the mix we look deeper at this move higher today. If the TRIN is not dropping with a rise, it tells us the advancing volume is the selling of stock. That could be profit taking and concern about earnings or with the market sitting on the highs, folks are lightening up. Either way the buying isn’t heavy and that is a concern to keep in mind as the market continues with this trend.
After the bell Intel put in a very nice report. Good top and bottom lines beating expectations and very healthy guidance. The stock pushed up after hours and on the reopen futures popped as well. That is likely to let us see a nice gap up in the morning, unless JP Morgan disappoints and pulls us back in ahead of the bell. I don’t think JPM will have any problem meeting expectations, so anything disappointing would be a surprise. They could blow out earnings and give the market an even bigger advance. An exhaustive gap is still possible in this light volume lift. To see an exhaustive gap heavy volume will have to spike in and then fade off to drop the market. OR we could see a gap and go on this steady slow volume. Two very different possibilities and until JPM and the early data release there won’t be any way to judge which way the market leans. Keep the neutral bias and we’ll see what Friday delivers.
Economic data for the week (underlined means more likely to be a mkt mover): Friday 8:30 Core CPI, 8:30 CPI, 8:30 Empire Manufacturing, 9:15 Capacity Utilization Rate, 9:15 Industrial Production, 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations. Monday US Markets are closed. Tuesday 9:00 TIC Long Term Purchases, 1:00 NAHB Housing Market Index. Wednesday 8:30 Building Permits, 8:30 PPI, 8:30 Core PPI, 8:30 Housing Starts. Thursday 8:30 Unemployment Claims, 10:00 Philly Fed Manufacturing Index, 10:00 Leading Index, 10:30 Natural Gas Storage, 11:00 Crude Oil Inventories. Friday nothing due out.
Some earnings for the week (keep in mind companies can change last minute: Friday pre market JPM and nothing after the bell. Monday US Markets closed. Tuesday pre market C, LMT, EDU, PETS, AMTD and after the bell IBM, PNFP. Wednesday pre market BAC, BK, EAT, COH, MS, STT, USB, WFC and after the bell EBAY, FFIV, NVEC, SBUX, XLNX. Thursday pre market SCHW, CAL, FITB, GS, KEY, LM, LUV, UNH, XRX, ZOLL and after the bell AMD, AXP, COF, GOOG, IGT, MSCC, SYNA. Friday pre market GE, KMB, MBFI, MCD, SLB, STI.
ES (S&P 500 e-mini) Friday’s pivot 1144, weekly pivot 1132.25. Intraday support: 1139.50, 1135, 1131.75, 1127.75, 1124.50-1123, 1117.50, 1113.50 fills gap. Resistance: 1147.25, 1153.50, 1157, 1160.50, 1169, 1177.50.
