Wednesday was a meandering day in a very narrow range to digest Tuesday’s drop. Volume fell off to leave us with lackluster action and no conviction throughout the afternoon. The TRIN managed to close at .88 where it sat for hours in the bulls territory. The VIX closed at 28.97, also a tight day with only 1.16 range. Gold rallied to close up $22.00 at $978.50 and oil closed unchanged on the day at $68.05 a barrel.
The day lost a modest amount of ground to close just under yesterdays range. Overall not much changed on in the market today. Each index (NDX, COMPX, SPX, Dow) all closed with the CCI just into negative territory, MACD trying to cross down, Stochastics down with the lines open, RSI also pointed down. All also closed under the 10dma and 20dema. Each index is just over 38.2% support on the leg up off the July 8ths lows The Dow 9034.47, COMPX 1932.49, 1563.67 NDX, and SPX 974.47 are the levels to watch for support. 50dma’s are also nearing as we pullback and the 8/17 swing lows. Leaving support just under us and plenty to test with another drop. Tuesday’s big drop just put us into a do nothing digestive range on Wednesday. Which winds us to move into Thursday and Friday.
Early data on Thursday will set the tone and then into 10 for additional data. The market is still not reacting to good data and working at this correction off the highs instead. A weak opening should be watched carefully for a reversal for some upside retracement. A stronger opening could hold us hostage until some conviction is worked out and we manage to move back to about half of Tuesday’s drop for a retest. I’m pretty neutral after today, because there isn’t much to make of this day and where we sit. We are in limbo and need that last drop to get to 38.2% or we need to retest at least half of Tuesday’s drop to see the market turn down and get to the 38.2% supports under us.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 Unemployment Claims, 10:00 ISM Non Manufacturing PMI, 10:30 Natural Gas Storage. Friday 8:30 NonFarm Employment Change, 8:30 Unemployment Rate, 8:30 Average Hourly Earnings.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market CIEN, FLOW, MOV, SCMR and after the bell COO, SNDA, ULTA, WIND. Friday pre market HRB and nothing after the bell.
SPX (S&P 500) closed -3.29 at 994.75. Support: 991.55, 974.47 38.2%, 954.39. Resistance: 1010.12, 1021.33, 1029.31, 1039.47.
INDU (Dow) closed -29.93 at 9280.67. Support: 9226.45, 9116.52, 9034.47 38.2%. Resistance: 9402.84, 9489.66, 9551.47.
