Tuesday brought in the turn around like we haven’t seen since February 4th. The market was hit in the head with the Greek Tragedy, mid morning Sovereign debt was downgraded on Portugal and Greece. The market used the news as a catalyst to pullback. The fall pushed the VIX to 22.81, which was the largest percentage gain in a single day in over 18 months. Volume came in fast and furious, it is a game of musical chairs when the market starts to rollover. Gold picked up some safe haven action and closed up $8.20 to $1162.20 and oil closed down $1.76 to $82.44 a barrel. The Goldman Sachs hearings were ongoing throughout the day and just ended about an hour ago into the late evening. I think they will send Greece some money for a bailout with the distraction that provided the market with…that is a joke. The almost 11 hours of testimony was crazy, but I don’t think the market learned anything to scare it into a drop. It was the downgrade off Greece that did it for the market and the 8 weeks of UP action.
Futures fell through support level after support level, even closed below S3 and that is a very rare occasion. The weekly pivots were tested and we fell through those. We finally got the pullback we need to see. Now as the ES sits on 1179.5 support the next key level is 1171 and onto 1167.75. The NQ watch the 1997.75 and then onto 1983.50. The TF has 716.90 and onto 709.30 levels to watch for below us. Early on I would expect some relief bounce to come in. For the ES look for 1189.5-1192.50, the NQ 2017.50-2021 and the TF 727.10-728.60 as we bounce early on.
The TRIN closed at 3.38 and the VIX is about 32% off the 10dma. That gives us every reason to look for a bounce early on. Now that doesn’t mean we won’t see the selling resume once we bounce or a weak opening and the market bounce and sit. It is a Fed day and the afternoon could be volatile. However, when we have a big range expansion following a NR7 day some digestion is usually needed. An opening move to retrace some of the losses and then sit in range would not be that surprising. Hearing from the Fed maybe another catalyst for the market though, so we will wait for that statement to see if any changes were made.
Economic data for the week (underlined means more likely to be a mkt mover) Wednesday 10:30 Crude Oil Inventories, 2:15 FOMC Statement, 2:15 Federal Funds Rate. Thursday 8:30 Unemployment Claims, 10:30 Natural Gas Storage. Friday 8:30 GDP, 8:30 Advanced GDP Price Index, 8:30 Employment Cost Index, 9:45 Chicago PMI, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre markets APU, BCRX, GLW, DOW, GD, HES, IACI, JBLU, MSO, MHS, PFCB, SAP, SO, S, WLP, and after the bell BIDU, CRA, FSLR, GG, LSI, OII, RYL, SUNH, TSRA, VAR, V, XLNX. Thursday pre market AEP, BJS, BG, CAH, CELG, CME, COP, XOM, HP, HURN, IMAX, IP, K, MOT, MYL, GAS, NS, OMX, ZEUS, PTEN, POT, PG, HOT, TSM, WM, and after the bell AEM, HIG, KLAC, MXIM, MET, PDLI, QLGC, SUN, TSO. Friday pre market AGN, CVX, DHI, LPNT, NDAQ, VFC and nothing after the bell.
NDX (Nasdaq 100) closed -42.84 at 2006.25. Support: 2003.80, 1988.37, 1927.05 38.2%. Resistance: 2023.33, 2037.11, 2046.92, 2072.34, 2100, 2196.17, 2239.23 Oct highs.
