Tuesday fell hard off the opening and ended the day just off the lows. The NDX closed off -1.82, COMPX -1.66, SPX -1.45, Dow -1.31 and RUT -1.17 on the day. The volume increased today which leaves a distribution day on the NYSE and Nasdaq. The TRIN closed at 2.21 bearish on the day and the VIX at 27.46 over last weeks highs. Gold closed up $3.70 to $1232.20 and oil down $1.47 to $71.3 a barrel.
The day left a gap overhead and a weak market took out last weeks lows. The Nas composite fell into 2113.88 78.6% fib support, NDX 1764.13 70.7%, SPX 1045.56 70.7%, and the Dow 10036 61.8% fib support. I don’t look at 70.7% as a key fib level, so the SPX and the NDX can still move onto 78.6% 1036.23 SPX and 1746.85 78.6% as key levels. The Dow did blink below 10000, but that didn’t seem to phase the market with a quick look and snapped back over. The daily charts all the key indexes closed under lower Bollinger band, but nothing else is oversold.
With the over 2 TRIN and the relentless selling we can look for some upside to retrace some of the losses. An early move up would give the market a quick breath and give us room to move. The TF look for 600.20-602.10 resistance, ES 1054.75 and onto 1058, NQ 1780.25 and to 1795.50 resistance. If we clear those levels a lot more upside is very likely to come in. A drop of Tuesday’s low a drop under 1043.50 and onto 1038 would be key on the ES. NQ 1762.50 and onto 1745 support. We’ll watch volume to continue to increase and to key off the economic data. Tuesday left the market weak off disappointing data on Existing Homes and now we have to look to Durable goods and New Home Sales. Because the market already dropped off existing homes the new homes would have to be really horrible to see that do additional damage. The market is ahead of that now and won’t take it as badly if we come in light. A number in line or close would be a breath of fresh air for buyers.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 8:30 Core Durable Goods Orders, 8:30 Durable Goods Orders, 10:00 New Home Sales, 10:00 HPI m/m, 10:30 Crude Oil Inventories. Thursday 8:30 Unemployment Claims, 10:00 Mortgage Delinquencies, 10:30 Natural Gas Storage. Friday 8:30 Prelim GDP, 8:30 Prelim GDP Price Index, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations, 10:00 Fed Chairman Bernanke Speaks.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market AEO, ISLE, TOL and after the bell JDSU, SMTC, TIVO. Thursday pre market DHT, FRED, PDCO and after the bell DLLR, JCG, NOVL, OVTI. Friday pre market FRO, TIF and nothing after the bell.
