Tuesday brought a sell off on heavier volume than we saw on Monday on the NYSE and Nasdaq. Futures were lower volume though so again we are splitting from equities. The one day drop on heavier volume is not a problem for the market, a single distribution day doesn’t do a lot. However, pulling off should be on light volume not heavy volume. Which will require a few more days to watch and see how we come out here. The TRIN closed at 1.50, the highest close since the 30th of July. The VIX moved higher to close at 26.02 on the day. Gold closed up 60 cents to $947.50 and oil down $1.15 to $69.45 a barrel.
The Nasdaq had been perched on the 10dma, now hovering over the 20dema, CCI dropped into negative territory, RSI fell into the 50’s, stochastics moving lower and MACD turned down. The S&P 500 and the Dow still has a flat MACD, RSI to 62-64, CCI at 40 and stochastics pointed lower and just barely under the 10dma. Little turn of the tone on the market after falling out of the range we’ve been sitting in. The Nasdaq did fill the open gap from July 29th which is now support. The SOX closed down for the fifth consecutive day, banks, hardware and brokers have held up significantly better and just coming off their highs. Banks and brokers were the worst performing sectors on the market.
Into Wednesday early data kicks off the day and the market will be jittery ahead of the fed meeting. It is likely to be slow ahead of the 2:15 announcement, a bond auction will be just ahead of that too. The Nasdaq had a strong bounce off the 1587 support, that will be key coming into Wednesday. The ES has room still and a gap yet to fill at 976-975 support. Some early retracement into Tuesday’s range and waiting on the Fed for the afternoon’s move will be our plan coming into the day. If the morning news is a kneejerk keep 1587 on watch, I’m not expecting a lot off the Fed, just some volatility but nothing huge. 60 minute futures have a left shoulder, head and could get a right shoulder with the mornings chop and some retracement, which leaves Tuesday’s low as the neckline.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 8:30 Trade Balance, 10:30 Crude Oil Inventories, Tentative Fed Credit and Liquidity Report, 2:00 Federal Budget Balance, 2:15 FOMC Statement & Funds Rate. Thursday 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 Unemployment Claims, 8:30 Import Prices, 10:00 Business Inventories, 10:30 Natural Gas. Friday 8:30 Core CPI, 8:30 CPI, 9:15 Capacity Utilization Rate, 9:15 Industrial Production, 9:55 Prelim Univ of Mich Consumer Sentiment, 9:55 Prelim Univ of Mich Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market LIZ, M, SLE and after the bell NTES, SINA, TIE. Thursday pre market APWR, DPS, KSS, URBN, WMT, and after the bell A, ADSK, BBI, CHINA, DV, JWN, RRGB, SUMT, TSCM. Friday pre market ANF, JCP and nothing after the bell.
ES (S&P 500 e-mini) Wednesday’s pivot 994.75, weekly pivot 1001.25, monthly pivot 947. Intraday support: 990.50, 984.50, 981.75 fills gap 7/31, 980, 976-975 fills gap 7/29, 973.25. Resistance: 994.50, 998.75, 1000-1001, 1004, 1007.50 fills gap, 1010.50, 1016, 1021-1022.50, 1029.50
NQ (Nas 100 e-mini) Wednesday’s pivot 1595.50, weekly pivot 1615.00, monthly 1541.75. Support: 1592, 1589.25, 1587, 1582, 1580, 1574.75. Resistance: 1603.75, 1612.75, 1614.75, 1622.50, 1625, 1627.75, 1632.50, 1634, 1643, 1650.25
