Monday erased last weeks losses with a big up move across the broader markets. The markets volume also came in heavier than Friday’s giving the up move some support and credibility. Market breadth strengthened as the day progressed after the first hour starting very weak and dropping Friday’s lows before reversing on the Nasdaq. The TRIN closed at .45 very bullish and the lowest close since May 4th and the VIX closed at 26.31 just off the 7/1 lows. Gold closed at $922 up $9.50 and oil down 20 cents at $59.69 a barrel.
Last week the losses came in Monday starting with a gap down and the day continued to sink, the remainder of the week stayed in range and sat sideways. Today an impulsive day to the upside helped kick the week off erasing last weeks losses. A lot of chatter about earnings to come this week and a great deal of interest in GS in the pre market on Tuesday. The focus will quickly turn to INTC after the bell and others to come later in the week. GS is expected to post a good quarter and if they offer guidance I would expect a fairly optimistic picture. After the run up today be careful of a sell the news morning. I don’t like to see a run up in anticipation of any news or to see the opposite either, but that is the markets way of pricing in things and it is normal.
Leaving us to look for the pre market news to set the tone, but we’ll be watching a move higher to pull in and let the market rest. The divergence on the 65 minute on COMPX, NDX, SPX and Dow concern me and if we didn’t have big earnings into Tuesday I would be definitely more bearish to retrace at least half of Monday’s run up. But that isn’t the case given the earnings to come. However, another leg up puts us overbought and then a pull in. So either way we look for some retracement to come in. The SPX is still hovering over the neckline of the head and shoulders and the Dow isn’t in motion either, leaving the bulls hopeful that earnings will be the catalyst I mentioned last night to get the market another push. The ES has 918 monthly pivot and the NQ 1468.75, we’ll be watchful for those as we clear 1450 and 900.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday 8:30 Core Retail Sales, 8:30 PPI, 8:30 Retail Sales, 8:30 Core PPI, 10:00 Business Inventories, 10:00 IBD/TIPP Economic Optimism, Wednesday 8:30 Core CPI, 8:30 CPI, 8:30 Empire State Manufacturing Index, 9:15 Capacity Utilization Rate, 9:15 Industrial Production, 10:30 Crude Oil Inventories, 2:00 FOMC Meeting Minutes, 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: Tuesday pre market GS, JNJ, MTB and after the bell ADTN, INTC, YUM. Wednesday pre market ABT, TXI, and after the bell JBHT, XLNX. 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) Tuesday’s pivot 888.25, weekly pivot 879.25, monthly pivot 918. Intraday support: 887.50, 885.25, 881.50, 877.50, 872.75 neckline-872.25 78.6%. Resistance: 896.75, 898.75 38.2%, 900.75, 904.25, 907.25 7/2 highs, 909.25, 914.75, 919.25 fills gap, 928.25.