Tuesday fell into red territory after a strong opening and ended on a negative note across the broader markets. Volume increased today over Monday’s light day to leave a distribution day. The VIX closed on a new low for the year at 20.90 and the TRIN closed at 1.66 bearish. Gold closed up 20 cents to $1058.30 and oil closed down $1.11 to $78.50 on the November contract which expired today and December the new front month closed down $1.04 to $78.92 a barrel.
After the bell SNDK and YHOO rallied off good reports, ISRG, GILD fell short and paid for it in the after hours trading. Futures didn’t have the reaction they did Monday after the close to Apple because none of the stocks reporting were as important to the market. However, that changes Wednesday morning with some financials and then Wednesday after the bell will be hit and miss. Thursday will hold the key to some bigger market impact though. Wednesday our data is light until 2:00 and that will let the market have some digestion time. Tuesday’s range was very narrow, which winds the market for a big move. After Monday sitting on new highs and now Tuesday trading down modestly to digest it is like a wait and see time.
Wednesday morning is likely to see some reaction to what MS, USB and WFC have to say, MCD and BA Dow components to look for. We will watch Tuesdays narrow range for a break out the bottom or the top to tip the market into a direction that is likely to continue. The only thing we need to be careful about is a gap down that is under Tuesday’s low, a bounce back into Tuesday range could retest that range before falling off. A gap and go day for the bears isn’t something I would count on, but with this action we’ve seen lately you can never rule it out. But as I said a gap down is likely to bounce then turn so watch for that. A gap up could let the bulls have early control, leaving us with difficult conditions to trade for the morning but the 2:00 beige book could help the later day volatility.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 10:30 Crude Oil Inventories, 12:00 FOMC Member Lacker speaks, 2:00 Beige Book. Thursday 8:30 Unemployment Claims, 10:00 CB Leading Index, 10:30 Nat Gas Storage, 1:30 FOMC Member Dudley speaks, 4:00 FOMC Member Evans speaks. Friday 8:30 Fed Chairman Bernanke Speaks, 10:00 Existing Home Sales, 11:30 FOMC Member Kohn speaks.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market MO, BA, LLY, GENZ, KEY, MCD, MS, NOC, PENN, STJ, USB, WFC and after the bell AFFX, AMGN, EBAY, FFIV, ISIL, NE, NVLS, OSIP, QLGC, VMW. Thursday pre market MMM, T, DOW, EMC, FITB, JBLU, KMB, MRK, NUE, PFCB, POT, R, TRA, TRV, UPS, WYE, ZMH and after the bell AMZN, AXP, BIDU, BRCM, BNI, COF, CAKE, CMG, NFLX, PMCS, RMBS. Friday pre market HON, IR, MSFT, SLB, WHR, and nothing after the bell.
COMPX (Nasdaq Composite) closed -12.85 at 2163.47. Support: 2160.77, 2150.53, 2143.29, 2070.27 50dma. Resistance: 2202.24, 2218.18, 2246.17.
SPX (S&P 500) closed -6.85 at 1091.06. Support: 1087.20, 1079.37, 1069.53, 1041.47 50dma. Resistance: 1127.19, 1158.76, 1177.55