Tuesday closed the day up across the broader indexes with the NDX +.71%, COMPX +.64%, SPX +.38%, RUT +.37% and Dow +.09%. Volume came in significantly heavier than Monday for an accumulation day, futures were almost double Monday’s volume. Monday was very light so it wasn’t hard to outpace, but the market did show up today. The VIX closed at 18.94, nearing oversold levels and the TRIN closed at .65 bullish on the day. Gold closed down $7.60 to $1346.80 an ounce and oil also dropped 54 cents to $81.67 a barrel.
Wednesday the market has early data, but it isn’t likely to be a game changer. The reversal off the lows came with volume and left the market sitting just off the highs. After the bell Intel reported earnings and traded up .7%, CSX traded up 2.2% and LLTC down about -3.7%. Futures have traded fairly flat throughout the evening after that news hit. The day closed near overbought levels, the market keeps getting the fuel to hold up but still no big break of this range. Hearing Intel outlook stay steady and no guiding down is a good start on earnings particularly on the tech side, now the morning will bring JP Morgan’s earnings to set the tone for financials.
Futures did test the daily pivots and came very close to the weekly with the NQ just .25 off, the ES came within 1.25 points and the TF was just .10 off. That is very unusual to get that close and not hit them, but today that was what we had delivered. The ES needs to stay over 1153, NQ 2012 and TF 684.30 for supports. As long as futures stay over those levels we are likely to continue the climb to the upside. The final hour on the day left a bearish engulfing candle if the first hour trades lower that would confirm a bearish engulfing pattern and lead the market lower. Getting the Es over 1173.75, NQ 2046.50 and the TF 700.70 would push the market higher.
Wednesday should continue to see nice volume and volatility. Early on we’ll be watching the VIX for a bounce, which would push the market lower. So watch the supports above for support. If the market becomes too oversold on the VIX it will contract our range and that leads to a very narrow range for us to trade. The best scenario is to not digest in tiny ranges but to pullback and avoid that for us. But we know the market does what the market wants, we just have to let the process direct us.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 8:30 Import Prices, 4:10pm Fed Chairman Bernanke Speaks,. Thursday 8:30 PPI, 8:30 Trade Balance, 8:30 Unemployment Claims, 8:30 Core PPI, 10:30 Natural Gas Storage, 11:00 Crude Oil Inventories. Friday 8:15 Fed Chairman Bernanke Speaks, 8:30 Core CPI, 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 CPI, 8:30 Empire State Manufacturing Index, 9:55 Prelim UoM Consumer Sentiment, 9:55 Prelim UoM Inflation Expectations, 10:00 Business Inventories.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market ASML, DPZ, JPM and after the bell APOL. Thursday pre market FCS, MTG, PGR, WGO and after the bell AMD, GOOG, JBHT, NARA. Friday pre market SCHW, GE, INFY, MAT and after the bell WDFC.
ES (S&P 500 e-mini) Wednesday’s pivot 1161.75, weekly pivot 1150.50. Intraday support: 1162.50, 1158.25, 1155.50, 1153-1151.75, 1148, 1143, 1136-1134.75 fills gap, 1127. Resistance: 1169-1169.75, 1173.75, 1181, 1185.75
