Tuesday delivered a blow to the market after a disappointing Consumer Confidence number, the worst in 10 months. Volume came in mixed with the NYSE higher and the Nasdaq lower, futures were all slightly lighter than Monday’s. The TRIN closed at 2.64 very bearish and the VIX at 21.37. Gold closed the day lower by $10.10 to $1103 and oil was down $1.47 to $78.84 a barrel. Big red across the markets with little relief after the data hit.
Keep in mind the narrow range on Monday let the market digest last weeks action which moved us right into 61.8% resistance. The market had to go or come off that level and possibly try again. The data was really a surprise and the catalyst we needed to move off of yesterdays narrow day. The expansion came in fast and furious before pausing on support and rotating around for some retracement. The fall did give the market a nice range and the over 2 TRIN leaves us looking for an early bounce. Each of the indexes fell back under the 50dma, which all converge in the 61.8% fib resistance zone, leaving that as the line in the sand over us still. Under us we still have the February 5th swing low as support.
Futures managed to test the weekly pivots today and we saw the daily as well. After last week being absent of those key levels we knew this week would deliver and it definitely made for a bulls eye target under us today. Wednesday we should see heavier volume come in, some institutions have to get things settled 3 days before month end leaving Wednesday as the key day, others can run right to the end of the month. Which is why futures and equities alike should see volumes increase Wednesday through Friday.
Watch for an early bounce, a gap down would be very exhaustive and give the markets an early snap. If we gap up it is more likely to dance around and leave us hanging around before we see a nice move. Until we take out last weeks high we look for weakness to come in off bounces. Plenty of data into 10 and Fed Chairman Bernanke along with Treasury Secretary Geithner speaking could provide us with a nice bit of volatility. Let’s hope no huge shockers off the data, the market can only take so much surprise in one week.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday tentative 10:00 Fed Chairman Bernanke testifies, 10:00 New Home Sales, 10:00 Treasury Sec Geithner Speaks, 10:30 Crude Oil Inventories. Thursday 8:30 Core Durable Goods Orders, 8:30 Unemployment Claims, 8:30 Durable Goods Orders, 10:00 HPI m/m, 10:30 Natural Gas Storage. Friday 8:30 Prelim GDP, 8:30 Prelim GDP Price Index, 9:45 Chicago PMI, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations, 10:00 Existing Home Sales.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market DLTR, FSRV, GRMN, SKS, TJX, TOL, UNFI and after the bell ESRX, GDP, NTES, CRM, SMSI, JAVA Thursday pre market ABK, CSE, FTO, ITWO, MYL, NEM, ZEUS, OMG, ZLC and after the bell DECK, DRYS, ERES, GPS, TIE. Friday pre market BIOS, FRO, GAS, TTI and after the bell AES.
