Wednesday closed the day with a modest gain across the broader markets on lighter volume for the NYSE and Nasdaq. Following a distribution day an up day with light volume does nothing but put the market on pause. Futures however did have some additional volume going into rollover, the ES and NQ were higher than yesterday and the TF was slightly lower. The TRIN closed bearish at 1.13 and the TRIN at 22.66. Gold closed down $22.40 to $1121 for four down days and oil down $1.92 to $70.70 making for six consecutive days down.
The broader markets dropped yesterday’s lows and then held on to come back into range for a reversal and close green. The Nasdaq just barely dropped Tuesday’s low, but the SPX and Dow were ready to rollover, once again saved by the Nasdaq. The weak opening on tech gave the market something to look at, but that also reversed and held the semiconductor and hardware sectors near the highs for the close. Telecom dropped but also snapped back to close into yesterdays closing range. Everyday we see the market holding and being resilient to sellers the bulls end up with the day on their side of the fence. This pause is not what the bears wanted to see, but that means we respect the bulls until things change. The Nasdaq holds the key, a rally into new highs would probably pull the weaker SPX and Dow along. All the news on the TARP repayments and now Citigroup (C) has news looming, that is scheduled for after the bell Thursday.
Into Thursday the economic data picks up for us in the pre market. The day is also futures rollover, that means we move into trading March (H) 2010 contract. For Qcharts and Esignal the new symbols are ES H0, NQ H0, TF H0 and for Tradestation use ES H10, NQ H10, TF H10. The new year requires more than just a letter change this quarter. The opening usually has split volume in the current contract (December) and the new one and takes awhile to settle down for us to trade. Don’t get in a hurry to do a lot until we have a good view of what is happening. Some rollovers are really choppy and others are fine to trade the opening. I expect a pretty smooth transition and that is likely to let us trade pretty early on.
Into Thursday again we focus on the 2009 highs retesting and the tech strength. The buyers continue to hold those sectors up, we will continue to see the bulls in control. If the tech sectors get some pullback that will lead the Nasdaq off the highs and the other indexes will quickly follow along.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday Futures rollover, 8:30 Trade Balance, 8:30 Unemployment Claims, 10:30 Natural Gas Storage, 2:00 Federal Budget Balance. Friday 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 Import Prices, 9:55 Univ Of Michigan Consumer Sentiment, 9:55 UoM Inflation Expectations, 10:00 Business Inventories.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market COST, DG, UNFI and after the bell LTRE, NSM. Friday nothing of interest
SOX (semiconductor) closed +2.13 at 339.09. Support: 335.03, 333.72, 332.41, 331.43. Resistance: 338.50, 341.11, 343.55, 347.31.
