Tuesday brought a trend day to the downside across the broader markets with the Nasdaq leading the way. Volume was split on the day with the NYSE just under Monday’s and the Nasdaq just over Monday’s. Futures came in just a hair under Monday’s volume. The A/D and U/D lines were heavy throughout the sell off, but not overwhelming until the last 90 minutes when things started to pick up steam and rule out any retracements on the day. The TRIN closed at 1.53 and the VIX at 30.87 back into the 50dma. Gold closed up $4.50 to $928.80 and oil down $1.15 at $62.90 a barrel.
Nasdaq Composite and the Nas 100 dropped the 50dma today and now piercing the lower Bollinger band on the daily chart. RSI is at 39, Stochastics 20, CCI 139-145 on both daily charts leaving still some room for a drop, intraday are oversold, but daily still has a little room. S&P 500 broke the 50dma a week ago and today the 200dma. SPX also sits on the head and shoulders neckline at 879.61. A drop of that support will lead to more downside and likely to retest 803 area. There is a key level at 845.66 prior to completing that pattern’s measured move into 803. So don’t expect a straight down move here if the neckline doesn’t hold the market. The Dow did come through the neckline at 8221 today, Wednesday a lower close confirms the breaks. Leaving the Dow with 7564 for the measured move on the pattern. 7958.08 is the key level between here and there, but these patterns have been carving out since early May and very powerful bearish setups to watch unfold now for confirmation into Wednesday.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 10:30 Crude Oil Inventories, NTA Fed Credit and Liquidity Report, 12:55 FOMC Member Evans Speaks, 3:00 Consumer Credit, Thursday 8:30 Unemployment Claims, 9:00 FOMC Member Duke Speaks, 10:00 Wholesale Inventories, 10:30 Natural Gas Storage, Friday 8:30 Trade Balance, 8:30 Import Prices, 9:55 Prelim Univ Of Michigan Sentiment.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market FDO and after the bell AA (kicks off earnings for the quarter), WDFC. Thursday pre market COMS, FCSX, and after the bell INFY, LWSN, NCTY. Friday pre market PGR and nothing after the bell.
SPX (S&P 500) closed -17.69 at 881.03. Support: 877.45, 845.66 38.2%, 811.51. Resistance: 899.79, 909.62 50dma, 912.06, 920.79
