Thursday closed the day with a modest gain after zig-zagging around in negative territory. The end of day ramp up in the last half hour really came in heavy to get the market back to green. Volume came in lighter than Wednesday’s to leave the market with another narrow range day on light volume. The TRIN closed bearish at 1.49 and the VIX at 25.05 17.5% off the 10dma. Gold closed up $21.00 to $1251.50 an ounce and oil down 88 cents to $76.79 a barrel.
Moving off the 10dma too far is reason to start looking for a change in direction. However we are still range bound but we’ve been pushing to the top of the range, which tells us this isn’t a time to be overly bullish. The cash indexes closed Wednesday with a shooting star on the day and today a hanging man, does leave the door open for a reversal off this swing high. The Dow and SPX just barely sit over the 200dma, still key support with the two narrow days just sitting over that moving average. The COMPX and NDX are just under the 50dma’s for a key level overhead.
The big push late day was probably quadruple witching settling ahead of Friday. Which could lead to a quiet day for us. Usually the volume is decent but the action holds range. Given the last two days of narrow range trading Friday may surprise us and break out of the range to expand instead of being quiet. Although Friday wraps up the quarter for traders, it doesn’t end the month and leads us to a Fed meeting next week and earnings will be picking up.
Friday look for a quiet start, likely to be slow motion. Look for the first half hours range to break and to move from there. Don’t get caught being overly optimistic for big moves to come in, it could stay in the weeks range and keep us tighter. A pullback early is likely to retest some of that late day charge near the highs and then we’ll find the direction after that first half hour.
Economic data for the week (underlined means more likely to be a mkt mover): Friday nothing due out. Monday nothing due out. Tuesday TBA Geithner Testifies on TARP, 10:00 Existing Home Sales, 10:00 HPI m/m, 10:00 Richmond Manufacturing Index. Wednesday 10:00 New Home Sales, 10:30 Crude Oil Inventories, 2:15 FOMC Statement, 2:15 Federal Funds Rate. Thursday 8:30 Core Durable Goods Orders, 8:30 Unemployment Claims, 8:30 Durable Goods Orders, 10:30 Natural Gas Storage. Friday 8:30 Final GDP, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Friday nothing due out. Monday nothing pre market and after the bell SONC, SCS. Tuesday pre market CCL, JEF, WAG and after the bell ADBE, JBL, RHT. Wednesday pre market RAD, SMTS and after the bell BBBY, DRI, NKE, PAYX. Thursday pre market DFS, LEN, MKC and after the bell FINL, HRB, ORCL, PALM, RIMM, SMSC. Friday pre market AZZ, KBH and nothing after the bell.
