Monday closed the day down -1.32% on the RUT, NDX -.95%, COMPX -.92%, SPX -.40% and the Dow -.38%. The days volume was light coming in under Friday’s on everything accept the NQ. The TRIN closed at 1.29 near the highs on the day and the VIX closed at 25.66 just over the 25.23 10dma. Gold closed the day down 20 cents to $1228.60 and oil down 73 cents to $73.11 a barrel.
The late day fall took hold and with the light volume it is very easy to push things to extremes quickly. That is likely to be the tone this week on and off anyway. Tuesday the economic data picks up and that is likely to help with volume and volatility. The drop brought the indexes to hold just over last weeks lows. Those lows are key support and a drop there would let the market see a much bigger fall into 10036.70 for the Dow, 2113.88 COMPX, 1783.60 NDX and onto 1746.85, the SPX 1056.11 and onto 1036.23. The momentum is still to the downside with the indicators still open to the downside, last weeks lows are the only wall in the way.
Futures did test daily and weekly pivots today, now the ES has 1050.50 support to watch, a break there leads us to look much deeper to 1029.5. The resistance we will need back over 1086.50 to look for any upside conviction. The NQ 1782 key support and resistance is 1846.50. The TF has 584.30 7/7 swing low and 626.30 resistance. I am looking for a weak start on the day and it won’t take long to be oversold with the drop that ended the day. Then we’ll look for a bounce to come in off a weak start on the day.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday 10:00 Existing Home Sales, 10:00 Richmond Manufacturing Index. Wednesday 8:30 Core Durable Goods Orders, 8:30 Durable Goods Orders, 10:00 New Home Sales, 10:00 HPI m/m, 10:30 Crude Oil Inventories. Thursday 8:30 Unemployment Claims, 10:00 Mortgage Delinquencies, 10:30 Natural Gas Storage. Friday 8:30 Prelim GDP, 8:30 Prelim GDP Price Index, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations, 10:00 Fed Chairman Bernanke Speaks.
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market BKS, BIG, MDT, and after the bell PSUN, RUE, PAY. Wednesday pre market AEO, ISLE, TOL and after the bell JDSU, SMTC, TIVO. Thursday pre market DHT, FRED, PDCO and after the bell DLLR, JCG, NOVL, OVTI. Friday pre market FRO, TIF and nothing after the bell.
