Thursday left the market with a much needed down day to see some correction. The market gave back yesterday’s gains plus a little, but it wasn’t a huge urgent drop, although volume did come in heavier on the NYSE and Nasdaq today for a distribution day. The TRIN closed at 1.36 bearish and the VIX at 24.24. Gold closed down $8.10 to $1106.50 and oil down $2.37 to $76.91 a barrel.
The down day did confirm Wednesday’s reversal candle with a lower close and on volume. After eight consecutive days of gains the market needed a day of rest and retracement. The stochastics came off, RSI fell, CCI turned down and the MACD is flattening off on the daily charts. The market did fill the gap from the 10th that was left open on the broader markets but still has one from the 6th open as well as 38.2% fib support below us. Nas Composite watch for 2119.22, Nas 100 1739.63, SPX 1076.34, and the Dow at 10088.70 for support. I will look for a bounce there off that 38.2% fib support on this last leg up. Friday should provide volatility for the market to close the week out. It was a very quiet week for economic data, but Friday has data throughout the morning that can be market moving.
Futures have not tested the weekly pivots and unless we fell completely apart that isn’t happening. To drop to 1054 on the ES and 1705.75 on the NQ in a single day left this week is very unlikely. Which leaves us to look for next weeks to be a very pivotal in option expiration week. The last hour on futures closed with a nice hammer for support, look for that to find confirmation with the first hour closing higher or no confirmation to guide us even lower. For the ES support below Thursday’s low is 1073.75 and the NQ 1760.50.
Economic data for the week (underlined means more likely to be a mkt mover): Friday 8:30 Trade Balance, 8:30 Import Prices, 9:55 UoM consumer Sentiment, 10:30 Natural Gas Storage, 11:30 FOMC Member Evans Speaks. Monday 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 Empire State Manufacturing Index, 10:00 Business Inventories, 12:15 Chairman Bernanke Speaks, 6:15 pm FOMC Member Kohn Speaks. Tuesday 8:30 PPI, 8:30 Core PPI, 9:00 TIC Long Term Purchases, 9:15 Capacity Utilization Rate, 9:15 Industrial Production, 10:15 FOMC Member Lacker Speaks, 1:00 NAHB Housing Market Index. Wednesday 8:30 Building Permits, 8:30 Core CPI, 8:30 CPI, 8:30 Housing Starts, 10:30 Crude Oil Inventories. Thursday 8:30 Unemployment Claims, 10:00 Philly Fed Manufacturing Index, 10:30 Natural Gas Storage. Friday nothing due out.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market BRKS, KSS, URBN, WMT and after the bell MSCC, JWN, DIS. Friday pre market A, JCP and after the bell SINA.
SPX (S&P 500) closed -11.27 at 1087.24. Support: 1076.34, 1058.41, 1045.64, 1012.72 38.2%. Resistance: 1105.37, 1127.19, 1158.76, 1219.07
INDU (Dow) closed -93.79 at 10197.47. Support: 10162.40, 10088.70, 10006.82-10000. Resistance: 10236.50, 10276.80, 10305.40, 10368.30, 10391.70, 10467
