Friday delivered a very narrow range day, the narrowest since April 26th which was the peak of the 2010 move up. Although Friday did close modestly green the tiny range was on higher volume than the market had seen on Thursday. The market was stalling and playing tug of war for quadruple witching to go out with a whimper. The TRIN closed at 1.00 and the VIX at 23.95 about 18% off the 10dma (watch for 23.14 200dma). Gold closed up $6.80 to $1258.30 and oil up 39 cents to $77.18 a barrel.
Wednesday, Thursday, and Friday all closed in range and left the three possible reversal candles in range. The Nasdaq 100 sits into the 50dma while the Nas Composite, S&P 500 and the Dow sit just under 50dma. The week closed higher and broke the three week range by a very small move up. Tuesday’s advance was the gain on the week, every other day was so narrow it just held the move. That leaves the market ready for a move and the bulls in the right seat. Having said that with the VIX so far off the 10dma and the TRIN over 1 4 of the last 5 days. An early pullback into 38.2% of the weeks range would be an orderly pullback. If the market holds that level the continuation is to the upside and we’ll need the upper Bollinger to open up for a test of the 50dma’s on the SPX and Dow.
Futures did not test the weekly pivot last week. The daily were hit and miss throughout the week too. A gap up could be exhaustive and then bring a pullback. I would rather see the pullback without a gap, but that still leaves the market in need of a pullback. The winding move the market had for three days is leaving us ready to move in a volatile way.
Economic data for the week (underlined means more likely to be a mkt mover): 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: 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.
SPX (S&P 500) closed +1.47 at 1117.51. Support: 1110.19 200dma-1108.79, 1090.89, 1072.29. Resistance: 1130.29, 1139.15 50dma, 1151.41
