Monday marked a split day on the market with the Nasdaq red and the Dow along with the S&P 500 slightly green. Market breadth stayed weak off the opening and didn’t show a lot of promise even with the final 2 hours pushing up off the lows. The TRIN did close neutral at .98 and the VIX at 29.10. Oil closed down $2.69 to $64.04, lowest in 5 weeks and gold down $6.70 at $924.30. Volume was higher across the board, letting us get back to pre holiday trading levels and just enough to keep things interesting. Still seeing the average volume lower than we had in May, but it isn’t changing a lot from June to July so far.
The Nas Composite is sitting on the 50dma (1772.43) and just over the 1753.78 6/23 swing low. RSI headed south to 47, MACD is still positive but trying to turn down, Stochastics headed down and CCI negative and just over -100 line support. Nas 100 (NDX) sits on the 50dma (1430.14) support and just over 1413.54 6/23 swing low support. Stochastics, RSI, CCI are all pointed down and the MACD sits flat with some hints that it could go down if we don’t see some buyers into Tuesday. S&P 500 (SPX) closed with a hammer just over 200dma (886.61) and 6/23 swing low 888.86 holding just over support with this candle. Stochastics are pointed down with the RSI and CCI also down, MACD is sitting negative but also very flat. Overhead the 10ma, 20dema and 50dma will be still resistance from 909.32-914.17. The Dow has dropped the 50dma and 200dma’s now and closed at the 6/23 swing low with a support hammer. To confirm that hammer we’ll need to see Tuesday find continuation to the upside. Stochastics, RSI and CCI are all headed south and the MACD is still negative and sitting tight. 8427.54 200dma and 8451.90 50dma are just overhead as resistance and this break below was a key move.
The SPX and Dow both have head and shoulder patterns sitting just over the necklines (8221 Dow and 879.61 SPX), both are seeing this right side as being pretty symmetrical so this is now very much a focus for a move to come. There could still be several days in range to finish rounding this out to come, the left side is roughly 18 days and the right is at 10 now, so don’t get in a hurry but as well as time there is size and overall look which is looking far more symmetrical than the number of days is saying. Break of the necklines is likely to show the bears to 845 on the SPX and 7958 very quickly and then see the pattern bounce around before completing the measured moves lower.
Futures did not test the daily or weekly pivots on Monday. That leaves Tuesday to look to move around the pivot and even up to the weekly still. That would be a large move off the weakness we saw today and should be suspect if we see that type of move if volume isn’t heavier than Monday’s. Market breadth should also support the move, or it is more likely to tell us shorts are in not buyers so watch that TRIN closely. Tuesday a move higher on the opening will be watched for weakness to short and look for the 6/23 lows test and even the necklines. If the opening doesn’t bring that weakness we have several gaps overhead to fill still and clear up after last weeks messy gaps. 932 on the SPX for resistance on any move higher will be key to hold up and stay off the downside.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday nothing due out, Wednesday 10:30 Crude Oil Inventories, NTA Fed Credit and Liquidity Report, 12:55 FOMC Member Evans Speaks, 3:00 Consumer Credit, Thursday 8:30 Unemployment Claims, 9:00 FOMC Member Duke Speaks, 10:00 Wholesale Inventories, 10:30 Natural Gas Storage, Friday 8:30 Trade Balance, 8:30 Import Prices, 9:55 Prelim Univ Of Michigan Sentiment.
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market GBX, ISCA and after the bell RT. Wednesday pre market FDO and after the bell AA (kicks off earnings for the quarter), WDFC. Thursday pre market COMS, FCSX, and after the bell INFY, LWSN, NCTY. Friday pre market PGR and nothing after the bell.
