Thursday another split day for the market, but the S&P 500 (SPX) broke the losing streak and closed green with the Dow while the Nasdaq 100 and Composite closed marginally red. Volume backed off today to under-pace Wednesday’s, which is not the pace we want to see on quadruple witching. Monday – Wednesday we saw volume building with each day and now we see it backing off. Which means Friday could be a coin toss since we didn’t see that participation today. The TRIN closed at .82 bullish with a U/D and A/D line that left us neutral on the day. The VIX closed at 30.06 after seeing 31.54 HOD and 29.60 LOD for a pretty good range. Oil closed up 28 cents to $71.31 a barrel and gold down $1.50 at $934.50 an ounce on the day.
Into Friday the market has quadruple witching. This takes place four times a year where stock index futures, stock index options, stock options and single stock futures all expire. This quarterly event usually brings a volatile week and a lot of turns in the market. We’ve seen Monday and Tuesday and down trend days, Wednesday a reversal day and Thursday more of a zigzag day than anything. The Nas 100 and Composite closed with inside days, very narrow ranges with the modest loss and the SPX and Dow tipped out of yesterdays range and closed green. That leaves Friday with some movement possibilities.
RIMM reported after the bell and is trading down about 5.5% at the moment. Earnings were fine but revenue inline is a problem in this market. It is likely to stutter on the opening and recover most if not all those losses. Which in turn will boost the Nasdaq. Tech was incredibly lackluster through the trade on Thursday and kept us looking for any support. Hardware (-.94%) and the SOX (-1.83%) both red days, but internets (-.75%) were also in that camp leaving only telecom (+.45%) to find any strength. Telecom isn’t enough to pull the Nas along, so into Friday we’ll watch those sectors for guidance on direction.
Once again we’ll bracket the days range, Wednesday and Thursday were digestive enough that a break on either side of the range will help to set a tone for continuation. The SPX was set to move, but the Nasdaq has to help out. He was an anchor on our day and definitely in need of jet propulsion to find any excitement. Which never came and left an inside day. Indicators are setting on support and key area’s we even are on the 200dma for the Nas Composite, Dow and S&P 500. Very critical levels and any movement on expiration day is suspect. So even a break there wouldn’t be given a lot of weight until Monday rolls around to either confirm that move or snap back. Futures did not test the weekly pivots this week, they are well over head (ES 938.25, NQ 1489 and ER 522.40). It isn’t likely we see them Friday, but it marks a week of missing those and leaves next week to reset and use them as very pivotal areas.
Economic data for the week (underlined means more likely to be a mkt mover): Friday nothing due out but its Quadruple witching expiration day. Monday nothing due out, Tuesday 10:00 Existing Home Sales, 10:00 HPI m/m, 10:00 Richmond Manufacturing Index, Wednesday 8:30 Core Durable Goods Orders, 8:30 Durable Goods Orders, 10:00 New Home Sales, 10:30 Crude Oil Inventories, 2:15 FOMC Statement, Thursday 8:30 Unemployment Claims, 8:30 Final GDP, 8:30 Final GDP Price Index, 10:00 Fed Chairman Bernanke Testifies, 10:30 Natural Gas Storage, Friday 8:30 Core PCE Price index, 8:30 Personal Spending, 8:30 Personal Income, 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 pre market KMX and after the bell nothing do out.
SPX (S&P 500) closed +7.66 at 918.37. Support: 904.25 200dma, 895.97 50dma, 880.84. Resistance: 923.81, 936.19, 945-946, 956.23 swing high.
