Friday closed the day red, making 8 of the last 10 down days. Volume was light on Friday leaving the market lackluster in a very narrow range. The VIX closed at 28.68 and the TRIN 1.08 bearish on the day. Oil closed at $69.83 down 98 cents and gold up $3.30 at $1004 an ounce. Disappointing data plagued the bulls this week and continued to push the market lower for the last four days.
Nasdaq Composite sits just over the 50dma, CCI is at extremes, RSI 44, Stochastics at 16, MACD opened to the downside. Nasdaq 100 also sits just over the 50dma, RSI is 45, MACD is pointed down, CCI is over -200 extremes and stochastics at 16. S&P 500 tapped the 50dma, but held over the support. The RSI is 44, Stochastics 16 and CCI -212 and the MACD pointed down. The Dow dropped 400 points this week, left the CCI -217, RSI at 44 and stochastics at 15 and on top of the 50dma.
Weekly charts the Nasdaq Composite, Nas 100, S&P 500 and the Dow all confirmed last weeks shooting star, MACD is coming together, CCI fell under 100 line support, RSI turned down and Stochastics crossed down. This made for the second consecutive week of losses. The last correction was 4 weeks down starting on June 14th, it was approximately 10%. A comparable move now would be corrective and let the market rest after all this upside.
The 50dma’s will be support, but with 38.2% support nearing the market could overshoot that key moving average to get that first retracement level. There are also open gaps left near those levels for support converging with about a 10% move off the highs. That would be a nice corrective move and let the market setup for earnings that kick off this week. Wednesday is the official kick off with Alcoa after the bell. After Friday’s narrow range and digestive tone, the market can unwind on Monday. Friday did have the TRIN bounce, but not as powerful as I expected. Early Monday look for some buying to come in for a little further move and let volume be our judge for participation and momentum.
Economic data for the week (underlined means more likely to be a mkt mover): Monday 10:00 ISM Non Manufacturing PMI. Tuesday nothing due out. Wednesday 10:30 Crude Oil Inventory, 3:00 Consumer Credit. Thursday 8:30 Unemployment Claims, 10:00 Wholesale Inventories, 10:30 Natural Gas Storage. Friday 8:30 Trade Balance.
Some earnings for the week (keep in mind companies can change last minute: Monday nothing pre market and after the bell MOS. Tuesday pre market PBG and after the bell YUM. Wednesday pre market COST, FDO, MON, and after the bell AA, RT. Thursday pre market MAR, PEP, PGR, TSCM and after the bell INFY, NUHC. Friday nothing due out.
NDX (Nasdaq 100) closed -3.92 at 1662.49. Support: 1658.84, 1647.41 50dma, 1617.15 38.2%. Resistance: 1693.99, 1717.12, 1733.57, 1754.54.
SPX (S&P 500) closed -4.64 at 1025.21. Support: 1021.70 50dma, 999.61, 974.73, 949.85. Resistance: 1042.95, 1057.15, 1067.27, 1080.15