Tuesday opened the week with a red day across the broader markets on mixed volume. The NYSE came in modestly higher than Friday while the Nasdaq came in slightly lower than Friday. Futures were mixed with the TF lower and the ES/NQ higher on the day. The VIX closed on the highs at 35.54 on the 10dma and the TRIN shot up the last 25 minutes of the day to 3.20. Gold closed the day up $11.80 to $1226.80 and oil down $1.39 to $72.58 a barrel.
The Nas Composite fell under the 200dma, the NAs 100 sits about 20 points over it still and the drop took the SPX and Dow further below the 200dma. As the broader markets sit sideways and in range with a few days up and a few back down action we can watch for an inverted cup and handle to form. The indexes could be forming the handle and the lows from the 25th would trigger the patterns. An inverted cup and handle is a bearish pattern and would have a large measured move given the size of the move we’ve had off the highs. For the SPX it is about 180 points off the 1040.78 lows from the 25th we could expect to see. Which makes that swing low very key for this market to hold for support or we look for the bigger drop to follow a break of support.
The late day selling accelerated into the bell and with the 3.20 TRIN that leaves us to look for some retracement into Wednesday morning early. The ES, NQ and TF all gave the daily and weekly pivots a test throughout the day. Wednesday look for 1081.75, NQ 1849 and the TF 650.80 to test on a bounce. Through those levels and the bulls may find some legs. A drop of 627.2 on TF, 1801.5 on the NQ and ES 1052.25 those lows from last week are likely to test.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 7:30 Challenger Job Cuts, 10:00 Pending Home Sales, All day Vehicle Sales. Thursday 8:15 ADP Non Farm Employment Change, 8:30 Unemployment Claims, 8:30 Revised Nonfarm, Productivity, 8:30 Revised Unit Labor Costs, 10:00 ISM Non Manufacturing PMI, 10:00 Factory Orders, 10:30 Natural Gas Storage, 11:00 Crude Oil Inventories, 11:15 Fed Chairman Bernanke Speaks, 12:15 FOMC Member Rosengren Speaks, 1:15 FOMC Member Hoenig Speaks. Friday 8:30 Non Farm Employment Change, 8:30 Unemployment Rate, 8:30 Average Hourly Earnings.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market DAKT, MDCI, ROLL, UNFI and after the bell APSG, CWTR, HOV, JOSB. Thursday pre market JOYG, STP, UTIW and after the bell COO, DCP, MATK, TTWO, ULTA. Friday pre market BTH, MPR and after the bell nothing due out.
ES (S&P 500 e-mini) Wednesday’s pivot 1077.50, weekly pivot 1077. Intraday support: 1063-1061 fills gap, 1057.50, 1052.50, 1048.75, 1038.50. Resistance: 1074, 1078.50, 1081.50 38.2%, 1084.50, 1089-1090, 1094.50-1095.75
