Monday started the week with a modest loss on very light volume.  The volume was the lowest we’ve seen in almost a month for the NYSE, Nasdaq and futures, that showed the digestive tone of the day’s range from last weeks big move. The VIX closed at 26.51 and the TRIN at 1.92, a more bearish tone than the price action showed.  Gold closed up $13.20 to $1066 and oil up 70 cents to $71.89 a barrel. 

Friday left a hammer for support and a possible reversal candle, we were looking for a higher move/close on the day to confirm that.  The market didn’t deliver that with the slightly lower close.  However, that doesn’t rule out a reversal pattern, it just will be a multistep move if that comes into play.  The low off Friday’s range is now key support, which is also just over 38.2% supports leaving that as the key zone for this market.  Support levels on the Nas Composite 2097.37, Nas 100 1705.49, SPX 1043.06, and the Dow 9714.22 should be watched to hold this week.  A move back over 2186.54 for the Nas Composite, 1783.41 Nas 100, 1084.97 SPX and Dow 10176.90 will help build the upside momentum and bring in a multiday lift for the market. 

I didn’t really see a lot of strength in the market that came with conviction today, which does take some of the wind out of my bullish sails.  I’m cautious about the upside, seeing Monday’s highs taken out with volume would take that cautious tone away.  The earlier we see that the better, otherwise I do think we get a test of the support outlined above.  Letting Monday’s narrow range work into expansion is what we should see on Tuesday, I don’t expect another tiny range to be delivered. 

At the end of the day futures were in an inverted cup and handle pattern.  For the Es it triggered off 1059.5 and the measured move is 1050.5.  A weak opening is likely to see that quickly.  1727.25 is the measured move on the NQ.  Those levels are also very close to fib supports.  The weekly pivots did test today and left highs just over those levels. 

Economic data for the week (underlined means more likely to be a mkt mover):  Tuesday 10:00 IBD/TIPP Economic Optimism, 10:00 Wholesale Inventories.  Wednesday 8:30 Trade Balance, Bernanke testifies before House Financial panel, 10:30 Crude Oil Inventories, 2:00 Federal Budget Balance.  Thursday 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 Unemployment Claims, 10:00 Business Inventories, 10:30 Natural Gas Storage.  Friday 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations.

Some earnings for the week (keep in mind companies can change last minute:  Tuesday pre market AGU, BIIB, BJS, KO, CVH, NYX, TIN, and after the bell BIDU, ULTI, DIS, XL.  Wednesday pre market CSC, DF, ICE, MMC, PFCB, S, and after the bell BSX, PACR, PRU.  Thursday pre market ECL, EXPE, FLIR, PTEN, PEP, and after the bell NILE, CEPH, CAKE, CMG, LVS, MFE, NVDA, PNRA, VARI.  Friday pre market IR, PAS, UPL and nothing after the bell.

ES (S&P 500 e-mini) Tuesday’s pivot 1059.25, weekly pivot 1067.25.  Intraday support: 1054.50, 1051.25, 1048 (weekly 78.6%)-1046.75, 1044.75, 1040.75-1039, 1034.25.  Resistance: 1064, 1071, 1078.25, 1081.50 38.2%, 1083.75, 1088.50, 1091.75, 1094 50%, 1096.50 fills gap, 1101.50, 1106.50