Tuesday brought in a slightly larger range than Monday and a green close across the broader markets. The volume on the NYSE, Nasdaq and futures came in slightly heavier than Monday. The reversal off the lows helped to increase volatility and volume, that lift came in when some talks about Greece getting financial backing from Germany hit the wires, there is also talk of what will come for Portugal, Ireland and Spain. Those countries are significantly larger economies than Greece and are said to be on shaky ground too. They haven’t come forward looking for help from the EU or Germany, but there is speculation that given Greece’s short fall that the others could follow. The TRIN closed at .50 bullish and the VIX at 26.00. Gold closed up $5.80 to $1072 and oil up $1.86 to $73.75 a barrel.
Friday left a possible reversal candle, which is still holding as support despite Monday coming in red and with light volume. Tuesday’s move up engulfed Monday’s weak day and had participation, leaving us to still look for a multistep reversal. Tuesday’s action was a good start, but another day up will need to come in and move us off this level. The 50dma’s are still overhead with 38.2% and testing that will be needed to determine if we are bouncing to resume a deeper pullback or reversing after the correction off the highs.
I know I’ve outlined the 38.2% levels each night but until we break through Friday’s low that is still in-line for the bulls to get us up too. So keep it handy until we get that test and either clear it or reject it. (Support levels on the Nas Composite 2097.37, Nas 100 1705.49, SPX 1043.06, and the Dow 9714.22 should be watched to hold this week. A move back over 2186.54 for the Nas Composite, 1783.41 Nas 100, 1084.97 SPX and Dow 10176.90 will help build the upside momentum and bring in a multiday lift for the market.) Last night I was optimistically bullish, I am still on the same fence. Data picks up in the pre market Wednesday and will likely help to set the tone for the day.
After the bell BIDU and DIS came in nicely and both traded higher. The INX was one of the weaker sectors on the day, so now with BIDU behind us it can find some lift and help the Nasdaq along. Disney (DIS) will help the Dow and S&P 500 out with its strong after hours move. Futures left another gap below us on the ES and NQ unfilled. The ES needs over 1081.50 and the NQ 1781.50 to see any rally step in with conviction. 1054.5 support for the ES and NQ at 1732.25 need to hold on any pullback or the upside isn’t likely to get any multi day rally going. The NQ on the chart below I labeled an A, B, C legs for a possible ABC pattern, which is a reversal pattern. The pattern can pullback, it just has to hold the prior low off C, Friday’s low at 1710.75 to hold up and move the market. 1781.5 resistance into 1786.50 will be key to trigger a strong move off this reversal pattern.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 8:30 Trade Balance, Bernanke testifies before House Financial panel, 10:30 Crude Oil Inventories, 2:00 Federal Budget Balance. Thursday 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 Unemployment Claims, 10:00 Business Inventories, 10:30 Natural Gas Storage. Friday 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market CSC, DF, ICE, MMC, PFCB, S, and after the bell BSX, PACR, PRU. Thursday pre market ECL, EXPE, FLIR, PTEN, PEP, and after the bell NILE, CEPH, CAKE, CMG, LVS, MFE, NVDA, PNRA, VARI. Friday pre market IR, PAS, UPL and nothing after the bell.
NQ (Nas 100 e-mini) Wednesday’s pivot 1752.25, weekly pivot 1749. Support: 1745.50, 1739, 1732.25, 1727.25, 1722.75, 1719.75-1718.50-1717, 1710.75, 1707, 1702.25. Resistance: 1757, 1763.75, 1769.75, 1773.25, 1781.50, 1785.50 fills gap-1786.50, 1803.25, 1809 fills gap, 1821.50, 1825
