Wednesday delivered a gap and go day across the broader indexes closing with the RUT +1.49%, COMPX +.96%, NDX +.76%, SPX +.71%, and the Dow +.68% rounding out the bottom still with a nice gain. Each index closed just over the 50% mark for middle ground. Volume did come in stronger than Tuesday to leave an accumulation day. The TRIN closed at 1.62 and the VIX at 19.07 on the high of day. Gold closed the day up $23.90 to $1370.60 an ounce and oil up $1.34 to $83.01 a barrel.
The markets gap and go run away train pushed the day higher until the last 90 minutes. Which slowly and very choppily brought the market off the highs. Which left a nice upper shadow out the top of the upper Bollinger band on the daily index charts. That isn’t bearish enough for a sell signal on its own, but we are definitely pushing the boundaries up here for being overbought. The market pulling off the highs late day did help work off some of the move and let the market rest. Which leaves the bulls still with fuel, but the high TRIN shows we are seeing some selling volume up here, that is either for shorting or profit taking. There is no real way to know if people are positioning short or exiting long positions to take profits.
Futures did move through the levels I outlined last night that would open the door for the bulls. However, the ES barely managed to close over 1173.75, the NQ cleared 2046.5 and TF well over 700.70. Which leaves me a little cautious with the ES still moving up, but the NQ left a decidedly higher move thanks to Intel’s push, which took most of the big cap tech stocks up today. Into Thursday the market sees early data and that will be the first big piece of information we’ve seen this week. Which is likely to leave the market ready for a move early in the day. After the bell Thursday the market will hear from AMD and GOOG, which will keep the market on its toes late day.
The ES over 1169.75, NQ 2042 and TF 694.50 still bodes well for the bulls to continue this run. It doesn’t take a lot of a pullback to keep working off the overbought conditions. I would not like to see another gap and go day, but if the early data comes in healthy that is possible. The market does often perform well following good earnings out of Intel, but as the days pass that usually fades so we’ll watch for that into Thursday.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 PPI, 8:30 Trade Balance, 8:30 Unemployment Claims, 8:30 Core PPI, 10:30 Natural Gas Storage, 11:00 Crude Oil Inventories. Friday 8:15 Fed Chairman Bernanke Speaks, 8:30 Core CPI, 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 CPI, 8:30 Empire State Manufacturing Index, 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations, 10:00 Business Inventories.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market FCS, MTG, PGR, WGO and after the bell AMD, GOOG, JBHT, NARA. Friday pre market SCHW, GE, INFY, MAT and after the bell WDFC.
