Monday brought a day of retracement on light volume. The market moved higher throughout the day, leaving the SPX and Dow retracing 38.2% of the losses since 9/23. However, the Nas 100 and Nas Composite didn’t even get out of Thursday’s range. Green close was nice, but the light volume is nothing to hang our hat on for the bulls. The TRIN closed at .55 and the VIX at 26.84 off 1.84. Oil closed up 46 cents at $70.41 and gold up $13.70 to $1018.00 an ounce.
Monday’s data surprised us and came in a little better than expected. After all the disappointments last week, this was a nice change of pace. Tuesday doesn’t have any data due out and Wednesday is light as well. However, Wednesday kicks off earnings season a much anticipated look at what companies will have to say over the next month gets underway. Financials outpaced tech today, which let the SPX and Dow retrace higher than the Nasdaq. A retracement into 38.2% is a corrective move and resistance. Retracing on light volume is considered corrective and we can’t get excited about further upside. 1042.95 on the SPX and 9616.46 on the Dow is the key resistance at 38.2%. The Nasdaq sits well under with 2089.23 COMPX and 1693.99 NDX 38.2% resistance. Unless the Nasdaq catches fire and comes up with the SPX and Dow I am not expecting this upside to continue. If we clear 38.2% on each index, THEN we will buy into this moving higher.
Futures did test the weekly pivot on the ES and TF and just 1 tick off the NQ’s. So that is pretty much cleared up and we can look for daily tests into Tuesday. We may see another narrow range lackluster day while the market continues to digest last weeks drop and get moving into the second half of the week.
Economic data for the week (underlined means more likely to be a mkt mover): Tuesday nothing due out. Wednesday 10:30 Crude Oil Inventory, 3:00 Consumer Credit. Thursday 8:30 Unemployment Claims, 10:00 Wholesale Inventories, 10:30 Natural Gas Storage. Friday 8:30 Trade Balance.
Some earnings for the week (keep in mind companies can change last minute: Tuesday pre market PBG and after the bell YUM. Wednesday pre market COST, FDO, MON, and after the bell AA, RT. Thursday pre market MAR, PEP, PGR, TSCM and after the bell INFY, NUHC. Friday nothing due out.
ES (S&P 500 e-mini) Tuesday’s pivot 1032.25, weekly pivot 1033.25. Intraday support: 1031, 1029.50 38.2%, 1026.75, 1024, 1020, 1015 10/2 swing low, 1009.25 fills 9/4 gap, 1006. Resistance: 1040.50, 1046.25, 1050.75, 1054.75, 1057.75