Monday kicked the week off with a continuation of Friday’s selling and closing on the lows. Volume fell off today to under-pace Friday’s. Futures also came in lighter, Friday was a distribution day, Monday was the light volume follow through. Which is suspect when volume doesn’t confirm the move. The TRIN closed at 2.07 and the VIX at 36.57. Gold closed the day up $23.20 to $1241 and oil down 7 cents to $71.44 a barrel.
Into Tuesday the market is sitting just over May 25th lows (COMPX 2140.53, NDX 1756.63, SPX 1040.78, Dow 9774.48) for support. Big drop in financials pushed the SPX and Dow to just over the May 25th lows, the NDX and COMPX has a little more room, but tech was nothing to hang your hat on today. The weakness was broadbased and after seesawing in range for half the day the bears took hold and didn’t look back.
Into Wednesday we look for an early bounce with the over 2 TRIN again today. The VIX is only 8.5% off the 10dma, but intraday the indexes are oversold. Which lets us look for an early bounce. The futures did not test the weekly pivots today which are up at 1077.75 on the ES, NQ 1854.5 and TF 646.10. Getting there would be a nice retracement for the markets. Futures just missed the daily pivots, but we were within ticks on each index, it is unusual to not trade into those levels. Which leaves Tuesday to be a magnet on the dailies and a nice retracement on the weekly to look for. The ES back over 1069.25, NQ 1834 and TF 636.8 would let the market recoup some losses. Rejecting those levels look for a much deeper pullback. The ES needs to hold over 1038.50, the TF 615.60, and NQ 1785.25 to see the bulls look for higher ground. A drop of those support levels leaves the bulls checking out for some ugly selling to take hold.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday 8:25 FOMC Member Duke Speaks, 10:00 IBD/TIPP Economic Optimism, 7pm FOMC Member Hoenig Speaks. Wednesday 10:00 Fed Chairman Bernanke Testifies, 10:00 Wholesale Inventories, 10:30 Crude Oil Inventories, 2:00 Beige Book, 4:00 Fed Chairman Bernanke Speaks. Thursday 8:30 Trade Balance, 8:30 Unemployment Claims, 10:30 Natural Gas Storage, 2:00 Federal Budget Balance. Friday 8:30 Core Retail Sales, 8:30 Retail Sales, 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations, 10:00 Business Inventories.
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market DG, TLB and after the bell PLL, TUTR, TTWO. Wednesday pre market CIEN, TITN, MTN and after the bell MW, SHFL. Thursday pre market APWR, DLM, LULU, SCHS and after the bell FNSR, INXI, NSM. Friday nothing due out.
ES (S&P 500 e-mini) Tuesday’s pivot 1055, weekly pivot 1077.75. Intraday support: 1045.75, 1039-1038.50, 1031.25, 1025.25, 1021.25-1020.25. Resistance: 1055.25, 1060.50, 1064, 1069.25-1070.25, 1076.25-1077, 1083-1083.50, 1088.25, 1092.75
