Wednesday left the day on new highs for the year and with a big advance. The volume came in heavier on the NYSE, Nasdaq and futures for the second consecutive accumulation day. The VIX closed at 15.59 just over the Monday lows (15.23) and the TRIN closed at .70 (very flat on the day). The A/D and U/D lines advanced throughout the day showing the lack of sellers but with an advance that started on a gap up and continued I would have looked for a .50’s TRIN not this high. This tells us although there was a great deal of up volume that could also be profit taking up here. Gold closed the day up $5.70 to $1159.10 and oil up $1.79 to $85.84 on the day.
The semi’s were up 4.3% on the day and banks trailed the advance but also up a hefty 3.39% for the top two sectors on the day. The SOX has big resistance at 403.52 overhead and banks at 57.25 where they closed. The Nas Composite has 78.6% 2519.97 resistance just overhead, the SPX 1228.74 61.8%, RUT 746.62 78.6% and the Dow 11245.90 nearing. The advance today left the market overbought on the daily charts and intraday. COMPX, SPX and RUT have the RSI over 80, stochastics over 95 and outside the upper BB on the daily charts. The Dow the RSI is 75, into upper BB and 92 stochastics, also overdone but not as much as the other indexes.
I would look for an early pullback into Thursday. With data in the pre market and into 10 the market is likely to be very volatile in the first hour. Wednesday’s advance was a wider range than we’ve seen so we can also look to digest that move. Which means the market pulls back or can move sideways for a digestive narrow range day. After the first hour sets in we’ll get a better view of just how narrow the day could be, end of day the market is likely to look to Google (GOOG) earnings that will be delivered after the bell Thursday. Friday morning has BAC and GE big caps reporting in the pre market which should also provide Thursday with volatility.
Futures did not test the daily pivots, because we just didn’t dip low enough to see them. They also left a gap open with the gap and advance move that came on the day. 1198.75 ES support and 2010.50 for the NQ would be where we look for any pullback to test. Any lower than that and we’ll likely see a deeper dip into Friday. With Intel (INTC) and JPM the market liked the good news they both released good news for the market, however we’ve seen that in prior quarters sell off over the days to follow. Keep that in mind and don’t get caught up buying this high with no pullback.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 Unemployment Claims, 8:30 Empire State Manufacturing Index, 9:00 TIC Long Term Purchases, 9:15 Capacity Utilization Rate, 9:15 Industrial Production, 10:00 Philly Fed Manufacturing Index, 10:30 Natural Gas Storage, 12:15 FOMC Member Bullard Speaks, 1:00 NAHB Housing Market Index, tentative Treasury Currency Report. Friday 8:30 Building Permits, 8:30 Housing Starts, 9:55 Prelim UofM Consumer Sentiment, 9:55 Prelim UofM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market SCHW, FCS, BTU, PPG, TITN and after the bell AMD, AMLN, BIIB, CBK, GOOG, ISRG, PLCM. Friday pre market BAC, GE, MAT and after the bell IEX.
SOX (semiconductor) closed +16.40 at 397.73. Support: 394.72, 393.64, 392.55, 391.00, 389.04 Resistance: 399.93, 400.21, 403.06
