Tuesday left the broader markets on the highs for another green day. Volume was mixed with the NYSE slightly higher than Monday and the Nasdaq slightly lighter than Monday. Futures all came in lighter on the day. The indexes although all closed green saw the Russell 2000 and the Dow outpace the advance of the Nasdaq and S&P 500. The VIX closed at 16.35 just over the 16.17 3/19 lows and our next support will be 15.82 from May 2008 levels. The TRIN was flat all day and closed at .74 right in the range it spent the day at. While the A/D and U/D lines meandered around until 2:20 when the momentum finally picked up to advance us into a move that found buyers. Gold closed up $6.30 to $1105.80 and oil up 31 cents to $81.91 a barrel.
While most of the day sat in a tiny range there was very little conviction and finally the indexes ticked through the highs after 3 prior attempts failed. That has been our story a lot lately, no conviction and creep mode then finally we move. That leaves intraday charts with a huge amount of divergence and overbought conditions quickly making it even more difficult to find anything to do with calculated risk. As the market continues to climb the RSI on the daily chart is now 75 on each index. Once we move over 70 we become cautious about overbought conditions squeezing the market too far, but we can move well over 80 before that really takes hold. So that alone is not a good indicator to gauge overbought/oversold conditions. Stochastics are still not overbought, CCI is not and the MACD is managing to push higher with these advances. At this point saying volume is hit and miss is a broken record and we know lately that hasn’t stopped anything.
Futures gave the weekly and daily pivots a good test on Monday but Tuesday they did not test the daily. The strong push in the late day left the ES under the 1175.75 key area and that is where we look to go now that we are over 1165. The NQ 1964.25 was within reach and the NQ stalled a few points before hitting that resistance. 1972.50 and onto 1975.25 beyond that. If we open up on Wednesday that may exhaust this move and come off, a flat opening would be the worst thing for us. Another slow move creeping higher would likely take hold of the day off a flat opening. A nice gap down would create a buying opportunity for us too. So anything but flat is ideal for Wednesday. With early data it isn’t likely we open flat so look for early volatility.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 8:30 Core Durable Goods Orders, 8:30 Durable Goods Orders, 10:00 New Home Sales, 10:30 Crude Oil Inventories. Thursday 8:30 Unemployment Claims, 10:30 Natural Gas Storage. Friday 8:30 Final GDP, 8:30 Final GDP Price Index, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market CMC, GIS, LEN, RBN and after the bell PAYX, CKR, RHT. Thursday pre market BBY, CAG, LULU, SCHL, GASS, TXI, UTIW and after the bell CAN, FINL, ORCL, PBY, TBIX, WTSLA. Friday nothing due out.
SOX (semiconductor) closed +8.22 at 372.47. Support: 370.37, 369.89, 368.03, 366.71. Resistance: 373.89, 374.34, 375.96
