Monday kicked the week off with a modest loss across the broader markets. The volume was about half of Friday’s on the NYSE and Nasdaq, futures came in about half as well. The COMPX and NDX traded in a very narrow range and left both indexes right into the 200dma. The SPX is still 30 points off under the 200dma and the Dow is 199 points under. The TRIN closed at 1.86 bearish and the VIX at 38.32.
The market still sits over the May 6th lows and with the Nasdaq indexes performing better than the SPX and Dow left the day in a tug of war. The RSI sits at 33-34, getting close to dropping 30 and becoming oversold. CCI and stochastics are still dropping but the action today started to narrow the bearish opening on them. Financials took the brunt of the days losses and led the SPX to the biggest loss on the broader markets. The days weak close leaves the market with the bears door open. With the market unable to take out Friday’s high and the accelerated drop the bears are still holding the cards.
The ES and TF did test the daily pivots, the NQ did test the weekly and no daily. The market can see only the NQ test the weekly and not get the ES/TF to that same level. It doesn’t happen often that the markets are so split that we see that, but the NQ was the stronger index today and had the lift while the other two just had no spring to that 1094.50/ 660.40 levels. The 30 and 60 minute futures charts still have a possible inverted head and shoulders, but to see that hold means last weeks low cannot break. The neckline is at Thursday’s high and that would lead into the gap overhead. A drop of the lows from the 21st is likely to open the door to a bigger fall and let the market become very oversold before we see a bounce. A weak opening watch for exhaustion to bounce us back into the gap, but not necessarily fill. We’ve seen some nice reversals off weak openings, but that isn’t required with the new sell the bounce we are seeing come into the market.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday 9:00 S&P/CS Composite 20 HPI, 10:00 Consumer Confidence, 10:00 HPI, 10:00 Richmond Manufacturing Index, 11:15 FOMC Member Bullard Speaks, 8:30 pm Fed Chairman Bernanke speaks. Wednesday 8:30 Core Durable Goods Orders, 8:30 Durable Goods Orders, 10:00 New Home Sales, 10:30 Crude Oil Inventories. Thursday 8:30 Prelim GDP, 8:30 Unemployment Claims, 8:30 Prelim GDP Price Index, 10:30 Natural Gas Storage. Friday 8:30 Core PCE Price Index, 8:30 Personal Income, 8:30 Personal Spending, 9:45 Chicago PMI, 9:55 Revised Consumer Sentiment, 9:55 UofM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market AZO, FLO, MDT, and after the bell DY, TIVO. Wednesday pre market AEO, FRED, TOL, ZLC and after the bell DBRN, HOKU, NTAP, TTWO, PAY. Thursday pre market BIG, COST, HNZ, SNSS, TIF and after the bell ESL, JCG, OVTI, SEAC. Friday pre market FRO and after the bell NCTY.
ES (S&P 500 e-mini) Tuesday’s pivot 1076.50, weekly pivot 1094.50. Intraday support: 1066.75-1065.50, 1062, 1059.25, 1051.25. Resistance: 1077, 1081.50, 1084.50, 1088.50, 1092.75-1093.75, 1097.50, 1104, 1110 fills gap-1111.75, 1118.25
