Monday closed the day split with the Nasdaq Composite and Nasdaq 100 slightly red and the S&P 500 along with the Dow modestly green. Overall the day was a narrow range that looked like it would be heavy early on and once again buyers stepped in and turned the market around. The VIX closed at 18.00 and the TRIN at 1.03, which is still bearish but was well off the days range it sat in at 1.35. Gold closed up $3.90 to $1105.0 and oil down $1.48 to $79.76.
The Nasdaq Composite (COMPX) and Nas 100 dropped through Friday’s low, but snapped back to close within Friday’s range. The hanging man candle left on Friday was confirmed with the modestly lower close today, but the volume was not there. Volume has been the elephant in the room on most every possible pattern developing for the bulls or the bears in the past three months, so this isn’t a new problem. Follow through on the pattern would result in a pullback though. The S&P 500 (SPX) closed just 52 cents higher than Friday’s high and like the Nasdaq indexes it dropped Friday’s low only to snapback in range. The Dow close very near Friday’s high and left a long lower shadow on that candlestick to form a hanging man. It will need a down day Tuesday to confirm that candlestick as a reversal bar. As a side note, hanging men candles are the least reliable reversal candles. So don’t assume the Nas follows through off this or the Dow can confirm it.
Futures finally straightening up and flying right, a daily and weekly pivot test today. The range was limited and much tighter than we’d like to see but it is only Monday. A Monday ahead of FOMC meeting the range is often small. The next meeting doesn’t take place until May 16th so we have a nice two month break and that is when we could start seeing more action out of the Fed. Tuesday will kick off the day with data and likely quiet down ahead of the Fed announcement. Not a lot of change is expected in the statement but there is likely to be some change in the wording. The market is looking to summer for any real change and there maybe hints of that timeline in the 2:15 release.
The close was a strong one and with a lag in AAPL and GOOG today the Nasdaq underpaced the other indexes. Look for the Nasdaq to shake off that weakness tomorrow early or for the rest of the market to look at the Nasdaq for leadership. Tread lightly with any gap up that the SPX and Dow are ahead of the Nasdaq, like the SPX and Dow over Friday’s highs and the Nas lagging, would likely not hold up and we’ll see the market drop.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday 8:30 Building Permits, 8:30 Housing Starts, 8:30 Import Prices, 2:15 FOMC Statement, 2:15 Federal Funds Rate. Wednesday 8:30 PPI, 8:30 Core PPI, 10:30 Crude Oil Inventories. Thursday 8:30 Core CPI, 8:30 Unemployment Claims, 8:30 CPI, 8:30 Current Account, 9:30 FOMC Member Hoenig Speaks, 10:00 Philly Fed Manufacturing Index, 10:00 CB Leading, 10:30 Natural Gas Storage, 12:30 FOMC Member Duke Speaks. Friday nothing due out
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market ARIA, DSW, and after the bell DFS, SGK. Wednesday pre market GIS, SMTS and after bell MLHR, HIS, NKE. Thursday pre market BKS, FDX, GME, LDK, ROST, WGO and after the bell COMS, PALM. Friday pre market PERY and nothing after the bell.
