Wednesday lets me erase the word modest from nightly comments. A HUGE lift was delivered today to the broader markets and volume join in the equities to mark a nice accumulation day. Futures fell short in the volume department, just a hair off yesterdays. The VIX hit 23.83 intraday for a new low on the year, but immediately reversed to close near the highs at 25.89. The TRIN stayed pretty modestly bullish until the final hour and it dropped off the .60’s it held onto into .36 at the close. Gold closed up $16.70 to $939.50 and oil up $2.02 at $61.51 a barrel.
First things first on this lift, a gap and go day following two up days is really a red flag. However, the lift continued and never let up to rally the markets throughout the day. The VIX was lifting with the market, the inverse relationship went out the door. One reason for that is the panic button gets hit and the second is expiration week. The panic button is when shorts start to cover or hedge and we see options volume accelerate in a big way. So we had a little of everything going on today following Intel’s nice surprise for the market.
Daily chart we are into the upper Bollinger, 100 line on CCI, 70’s for stochastics, 59-62 RSI on each of the broader markets. The NDX,COMPX, SPX and Dow just barely cleared the July highs and now peaking into the June range. The move through the July 1st highs and close on the highs left the marubozu candle. Usually that is very bullish but require digestion. Swing highs just overhead from June 11th are going to be the markets next obstacle. But the upper Bollinger and resistance here is likely to pull in before that step is attempted. 65 minute charts had divergence most of the day on the indexes and the key sectors. That also bodes well for early pullback.
Early data and another round of earnings will let the market see some volatility in the premarket as well as off the opening. The market will be looking forward into Google (GOOG) and IBM earnings. Intel’s good show will now need some back up for the market to continue. We need to see a pullback, even if it is half of Wednesday’s rally. That would do little in the way of pullback’s but would then allow for digestion of this move. Let the market find a resting place and sit there until we hear from GOOG and IBM. They have impact across the markets and waiting on the news would let the market wait.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 Unemployment Claims, 9:00 TIC Long Term Purchases, 10:00 Philly Fed Manufacturing Index, 10:30 Natural Gas, Friday 8:30 Building Permits, 8:30 Housing Starts, 1:00 NAHB Housing Market Index.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market BIIB, CY, FCS, JPM, MBFI, NOK, PII and after the bell ESLR, GOOG, IBM, PMCS. Friday pre market BAC, C, GE, MAT, WBS and nothing after the bell.
ES (S&P 500 e-mini) Thursday’s pivot 923.50, weekly pivot 879.25, monthly pivot 918. Intraday support: 923.75, 919.50, 916.50, 912.50, 907.50-907 38.2%, 901 fills gap. Resistance: 928.25 7/1 swing high, 934, 938.75, 941 fills 6/12 gap, 945.25, 953 6/11 highs.
