Monday started the week with a pullback and a brought the volume up a notch for a distribution day. With the indexes off 2+% this was the biggest down day we’ve seen since April 20th. The A/D and U/D lines were heavy after 30 minutes only to continue to increase in weight throughout the day, the TRIN closed at 2.51 also very bearish. The VIX closed at 30.81 up 2.66 on the day, our first close back over 30 since June 4th. Gold closed down $13.70 to $927.00 an ounce and oil dropped $1.50 to $70.54 a barrel.
The sell off is a nice pullback to the gap up we had on the first of June. The gap fill will be support and pull us under the 20dema on each index. Each also has the CCI at the 0 line, Stochastics pointed down, MACD still very tight and the RSI dropping into 56-52. The Dow is also right back on the 200dma (8628.11). A gap down would get us into the 5/29 gap fill and support, it would also pull us in a little more since the volume has been pretty horrid most of June we could use this correction. A gap down would also exhaust this move for an oversold look and let us see an early bounce. The over 2 TRIN also sets us up for an early up move. It doesn’t have to sustain the move up so look for a possible zig zag or even reversal day that comes off a weak open and then sits quietly in range once the bounce comes in. I don’t expect to see another trend day into Tuesday, but a zig zag day could very well close us lower and make for 2 red days this week. Early data Tuesday will also help to set the days tone, I would rather not see a gap up to start the day, it would be very hard to hold onto that move. A weak start is more likely to let the market work this pullback off and then move up mid morning.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday 8:30 Building Permits, 8:30 Core PPI, 8:30 Housing Starts, 8:30 PPI, 9:15 Capacity Utilization Rate, 9:15 Industrial Production, Wednesday 8:30 Core CPI, 8:30 CPI, 8:30 Current Account, 10:30 Current Account, 10:30 Crude Oil Inventories, 12:00 Fed Chairman Bernanke Speaks, Thursday 8:30 Unemployment Claims, 10:00 Philly Fed Manufacturing Index, 10:00 CB Leading Index, 10:30 Natural Gas, Friday nothing due out but its Quadruple witching expiration day
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market BBY, SFD and after the bell ADBE, NCTY. Wednesday pre market ATU, FDX and after the bell HIS. Thursday pre market CCL, SJM, PRGS, WGO, and after the bell RIMM, SGK, SWHC. Friday pre market KMX and after the bell nothing do out.
ES (S&P 500 e-mini) Tuesday’s pivot 922, weekly pivot 938.25, monthly pivot 904.50. Intraday support: 913.25, 904(we break here look for 890.5), 898.75-897, 890.50 (break here look for 872.75), 886.50. Resistance: 925.75, 929.50, 931.50, 934, 938.50, 941 fills gap, 944.75
