Monday made an up day on light volume, the lightest volume the NYSE and Nasdaq has seen in a week. The day did add to the market’s gains in October and of the last 11 days, 10 have been up. The VIX has been hanging around the years lows since Thursday of last week and remained there with a close at 21.49 after setting a new low on the year at 20.91. The TRIN closed at 1.24, never really dropping into the bulls territory today despite the move up across the market. Gold closed up $6.70 at $1058.20 and oil up 91 cents at $79.44 a barrel.
After the bell TXN reported and traded higher on good earnings and guidance, AAPL also traded up after the bell on good earnings exceeding expectations, one small issue for me in the conference call was the COO Tim Cook said gross margins for Q1 will be 34% vs 35.25%. That didn’t stop the stock from running to all time new highs at 204.85, they were 202.96 from 12/23/07. The stock did settle at 200.32 area, but watch in the pre market session to see where it sits. This is a busy earnings week, the biggest of the quarter so more will roll out tomorrow to add to the markets tone. There is also economic data in the pre market that will be watched for movement as well.
The S&P 500 and the Dow traded to new highs on the year and closed at a new highs on the year, holding the days gains. The Nas 100 and Nasdaq Composite, lagged throughout the day, but finally did catch a bid and also made new intraday highs on the year and closed at a new high on the year. Expect a gap up in the morning, unless we have some really scary economic data, none of the earnings should knock the market off its feet, although there are some big cap stocks reporting. They should have more sector impact than overall market, watch for Dow components DD, CAT, KO and UTX though.
A gap up will either exhaust this move and pull us back into the prior highs, or it will give the market reason to finally leave this range and break away. A gap and go day is the hardest to trade, because things are up already and get overbought quickly and divergence usually rears its ugly head early on. The only way to trust the move is to watch for big market breadth early and no pullbacks. Daily stochastics are really flat, we are very close to the upper bollinger bands, the CCI is just over 100 line and RSI at 68ish, so some room to move. A gap up is likely to take us outside the upper BB on the daily and on the 65 minute as well, that will require some pullback to get snapped back in or a lot of digestion after the first hour to pull us back in. That would be when the chop sets in and bores us to death, so be careful if we see that setting in and look for that late day move of continuation.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday 8:30 Building Permits, 8:30 PPI, 8:30 Core PPI, 8:30 Housing Starts,11:00 FOMC Member Warsh Speaks. Wednesday 10:30 Crude Oil Inventories, 12:00 FOMC Member Lacker speaks, 2:00 Beige Book. Thursday 8:30 Unemployment Claims, 10:00 CB Leading Index, 10:30 Nat Gas Storage, 1:30 FOMC Member Dudley speaks, 4:00 FOMC Member Evans speaks. Friday 8:30 Fed Chairman Bernanke Speaks, 10:00 Existing Home Sales, 11:30 FOMC Member Kohn speaks.
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market BK, BIIB, BLK, EAT, CAT, COH, KO, DD, LXK, EDU, OXPS, PFE, STT, UAUA, UTX, UNH and after the bell CREE, GILD, ISRG, SNDK, SONC, SYK, YHOO. Wednesday pre market MO, BA, LLY, GENZ, KEY, MCD, MS, NOC, PENN, STJ, USB, WFC and after the bell AFFX, AMGN, EBAY, FFIV, ISIL, NE, NVLS, OSIP, QLGC, VMW. Thursday pre market MMM, T, DOW, EMC, FITB, JBLU, KMB, MRK, NUE, PFCB, POT, R, TRA, TRV, UPS, WYE, ZMH and after the bell AMZN, AXP, BIDU, BRCM, BNI, COF, CAKE, CMG, NFLX, PMCS, RMBS. Friday pre market HON, IR, MSFT, SLB, WHR, and nothing after the bell.
ES (S&P 500 e-mini) Tuesday’s pivot 1090, weekly pivot 1080.25. Intraday support: 1083.75, 1079.75, 1075.75, 1075.75, 1070-1068.50 fills gap, 1063. Resistance: 1095-1096, 1098.75, 1101.28, 1107.75, 1110.50, 1113.25, 1126.50.
