Monday delivered a big move to the upside and closed on the highs. Volume came in heavier than Friday’s on the NYSE and Nasdaq, but remember that volume on Friday was the lightest of the week. Today’s volume did not outpace any other day last week. Futures volume came in lighter than Friday’s. The TRIN closed very bullish at .38 and the VIX at 23.15. The TRIN hasn’t seen levels that low since July 15th, it isn’t real unusual to see only one day a month under .50. October had on at .41 on the 14th, September none, August had one and then back to July for one in the 30’s. Showing no selling pressure on the day. Gold closed up $5.90 to $1101.60 and oil up $1.92 at $79.35 a barrel.
2009 highs are just overhead on the SPX (1101.36), NDX ( 1780.83) and COMPX (2190.64). The Dow did move through the highs by 108 points and closed up there. On the daily chart the Dow closed with 64 RSI, 97 stochastics and through the upper Bollinger band, a sign of fatigue across the board. The RSI can still move into the 70’s before we get overly concerned but stochastics can’t exceed 100. Which will require a pullback or sideways to digest this move today. The SPX, NDX and COMPX are not at that same level and plenty of room yet to move.
65 minute charts are a different story though, the RSI is at 64-66, stochastics at 98, CCI under 100 which was diverging ALL day long. All are also into the upper Bollinger bands, showing us exhaustion on every index and even the key sectors look the same. The divergence bothers me more than anything, but that gets over done on trend days. The breadth was so strong today there was no stopping the bulls today. With the close that strong and some good after hours news a move up to exhaust this days actions wouldn’t be out of the question into Tuesday. A gap down would allow the divergence and overbought look to correct easily, then see continuation into the 2009 highs.
I mentioned last week (Thursday) that we had an inverted head and shoulders on the 60 minute ES and NQ, the ES neckline was at 1062 area for a move up to 1095 for completion. The NQ neckline was at 1715 area for about a 72 point move into 1787 for completion. The ES was very close today, the NQ has plenty of room today. Over the weekend on comments I mentioned the possibility of an ABC pattern that started early July and with this pullback completed a C leg off the October 21st highs. A retest of the highs on the 21st will either break out or we’ll see a lower high/same high to reverse off this pattern. A break would let us see 2 more legs up for a 5 wave instead of an ABC. There is no way to know which it is, until those highs are broken or failure to break out happens. Futures did not test weekly pivots today, which are WAY under us now, will take a big turn to see those this week ES 1054, NQ 1705.75, TF 571.10. The daily pivots did not test today either, that isn’t unusual with a gap and go day. However, that will put Tuesday’s on watch to be an area of interest. Plenty to watch for into Tuesday, but the key is do not try to top pick, trading against market breadth and momentum is very dangerous.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday 10:00 TIPP Economic Optimism, Wednesday US Bank Holiday (Veterans day), Thursday 8:30 Unemployment Claims, 11:00 Crude Oil Inventories, 2:00 Federal Budget Balance, Friday 8:30 Trade Balance, 8:30 Import Prices, 9:55 UoM consumer Sentiment, 10:30 Natural Gas Storage, 11:30 FOMC Member Evans Speaks
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market BZH, TYC and after the bell PAAS, WTW. Wednesday pre market APU, M, ZOLL and after the bell AMAT, CSC, NTES, WES. Thursday pre market BRKS, KSS, URBN, WMT and after the bell MSCC, JWN, DIS. Friday pre market A, JCP and after the bell SINA.
NQ (Nas 100 e-mini) Tuesday’s pivot 1758.25, weekly pivot 1705.75. Support: 1757.25, 1751, 1748.50, 1740.75, 1733.50, 1729.75 fills gap, 1722.75. Resistance: 1767.50, 1772.50, 1777.25, 1779.25 10/21 swing high, 1789.75
