Nas Composite closed lower in the week, Nas 100 barely closed higher (about a point), S&P 500 closed about 4 points lower, and the Dow closed about 9 points lower on the week. All indexes closed down on the day off the Dubai credit crisis news. Which caused Friday’s open to fall off a cliff and the shortened day was able to cut the losses with some upside. Volume was very light throughout the week, thanks to the holiday and shortened week, which doesn’t let us hang our hat on much until participation returns. Crude fell $2.15 to $75.81 and gold down $15.22 to $1171.78 an ounce. The VIX jumped with the markets drop to close at 24.85 after spending all week just over the years lows.
Using the high off October 28, 2007 to the lows of March 8, 2009 (it is best to put up weekly timeframe to see this swing) the Nas Composite has sat under 2251.85 61.8% retracement since September 13th crossing of 50%. Nas 100 crossed 50% at the end of August but still just hitting its head on 1781.28 61.8%. S&P 500 moved over 38.2% in August but still sits under 50% 1121.44 retracement. The Dow moved over 38.2% August 16th but still is under 50% at 10334 resistance. These resistance levels are like the wall of worry for the market and the range has been tight under the fib levels digesting the quarters earnings. Which are now finished and we will only see second tier companies reporting.
Into Monday look for the market to start a little slower to work off the turkey, but we should pick up steam pretty quickly. Friday’s news throws a wrench into the quiet week and opened the range up. Continuation of that weakness would not be unexpected, but a bounce first into Friday’s highs could come in first. Watch for Friday’s highs to retest, a break there would be a bigger move than I expect to see. At that point I would say the US markets decided Dubai isn’t a big impact and we shrug it off. A rejection of those highs or failure to retest, look for 10183 on the Dow, SPX into 1081, NDX 1752.47 and COMPX 2114.81. None of those levels are very far off, but look for the market to digest there.
Economic data for the week (underlined means more likely to be a mkt mover): Monday 9:45 Chicago PMI, Tuesday 10:00 ISM Manufacturing PMI, 10:00 Pending Home Sales, 10:00 Construction Spending, 10:00 ISM Manufacturing Prices, All day vehicle sales. Wednesday 7:30 Challenger Job Cuts, 8:15 ADP Non Farm Employment Change, 10:30 Crude Oil Inventories, 12:30 FOMC Member Lacker Speaks, 2:00 Beige Book. Thursday 8:30 Unemployment Claims, 8:30 Revised NonFarm Productivity, 8:30 Revised Unit Labor Costs, 10:00 Fed Chairman Bernanke Testifies, 10:00 ISM NonManufacturing PMI, 10:30 Natural Gas Storage. Friday 8:30 NonFarm Employment Change, 8:30 Unemployment Rate, 8:30 Average Hourly Earnings, 10:00 Factory Orders.
Some earnings for the week (keep in mind companies can change last minute: Monday pre market NRGY and after the bell OVTI. Tuesday pre market ISLE, SPLS and after the bell SNDA. Wednesday pre market PTRY and after the bell SEAC, SIGM, SNPS. Thursday pre market DLM, TOL and after the bell MRVL, NOVL, ULTA. Friday pre market BIG and after the bell FMCN.
SPX (S&P 500) closed -23.36 at 1087.27. Support: 1081.66, 1073.83 50dma, 1061.86, 1047.78 Resistance: 1110.27 fills gap, 1121.44 50% on weekly, 1127.19-1131.86, 1158.76, 1228.74 61.8% on weekly.
