Tuesday left the market with another red day and higher volume, to leave a distribution day for the NYSE and Nasdaq. Market breadth was pretty neutral and slightly bullish until 11:00 when the market took a turn and was unable to break out to new highs, leaving us selling off steadily throughout the day. The TRIn closed at 1.69 and the VIX at 32.70. Gold closed up $4.90 to $932.40 and oil down 14 cents to $70.48.
Nasdaq Composite has 1774.33 gap still open that will be support. Stochastics have dropped into 30, CCI fell negative today, MACD is slightly sloped down and RSI fell into 52, the trendline is right under us on the COMPX and NDX. Nas 100 has the gap 1435.57 gap support and like the COMPX has a swing high there as well for support. SPX fell into the 200dma (907.90) and filled the 919.14 gap from 5/29. Trendline broke and now another day closing under we would be looking for a fall into 845 area, the 50dma is at 892.41, which leaves the 200dma and 50dma really tight here and key for this index. The Dow is into the trendline and fell through the 200dma (8612.06) with the 50dma at 8332.98 for support about 170 points off.
The market coming off this high and out of the range we spent 10 days in is expanding and getting heavier. Two back to back trend days is unusual, but obviously happens. The market falling this far in two days will require some digestive range. With the NDX and COMPX at key levels the market will likely digest in range into Wednesday. The weak close leaves the market open for further downside, but with the Nas on support the move is exhausting. SPX through the 200dma, is most certainly now what this market wanted to see, but we have support closing in and after this lift some correction is needed.
Early data Wednesday sets us up to start with an early move. I’m going to look for early weakness to exhaust this move and give the market some digestion. A reversal day or a zigzag day still should come in this week, but Wednesday is most likely to be a digestive zigzag day. Plenty of divergence by days end and exhaustion on the drop across the board leaves us in need of a bounce. Watch for the bounce early on and for early data to set the tone.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 8:30 Core CPI, 8:30 CPI, 8:30 Current Account, 10:30 Current Account, 10:30 Crude Oil Inventories, 12:00 Fed Chairman Bernanke Speaks, Thursday 8:30 Unemployment Claims, 10:00 Philly Fed Manufacturing Index, 10:00 CB Leading Index, 10:30 Natural Gas, Friday nothing due out but its Quadruple witching expiration day
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market ATU, FDX and after the bell HIS. Thursday pre market CCL, SJM, PRGS, WGO, and after the bell RIMM, SGK, SWHC. Friday pre market KMX and after the bell nothing do out.
ES (S&P 500 e-mini) Wednesday’s pivot 912.75, weekly pivot 938.25, monthly pivot 904.50. Intraday support: 904(we break here look for 890.5), 900.75, 898.75-896.75, 890.50 (break here look for 872.75), 886.50, 881.50. Resistance: 909.50, 911, 913, 917.25, 920.25, 924.25, 929.75
