Tuesday started strong with a gap up and finished even higher. The market showed its resiliency again today to close higher across the board, however unlike Monday’s lift, the volume showed higher participation today. An accumulation day for the bulls was needed after that light volume lift yesterday. The TRIN closed at .86 which was about mid range, the VIX closed at 25.64. Gold moved to new all time highs today, closing at $1039.70 +21.90 and oil up 51 cents to close at $70.92 an ounce.
The Nasdaq lagged on Monday, leaving us under that key 38.2% resistance, well Tuesday took care of that when we gapped open right to it. That is the easy way to clear resistance and to get things moving. The SPX and Dow moved with the Nasdaq and held the gains to close near the highs. The indicators on the daily charts for each index closed with the RSI turning up, CCI back near 0 line, Stochastics turned up and the MACD is trying to turn up. The Dow closed into 9731.61 61.8%, Nas Composite 2104.22 50% (2119.20 61.8% overhead), Nas 100 1705.56 50% (1717.12 61.8% overhead), SPX closed at 1057.15 61.8% resistance. 61.8% is key now to let the market revisit the highs from September. With the Nasdaq still lagging, we have to watch again for another gap into that level. Certainly didn’t waste anytime showing us that 38.2% was not a problem so this is more than a bounce at this point and the bulls bought into the dip.
Monday the market turned off the 50dma’s and now confirmed with another day over. That also shows us the dip buyers stepped in. I did not give Monday’s action a lot of thought it was not led by tech and on light volume, that is usually a sign for no follow through. The gap and go action no doubt trapped some shorts below us and any weakness or poor data would likely send the market in a big tug of war to get that cleared up. With Wednesday after the bell earnings from Alcoa (AA) the market maybe jittery. Although Alcoa isn’t a big hitter in the market any longer, it will start to set the tone on earnings this quarter. We’ll see the big impact stocks next week and the weeks to follow.
Into Wednesday look for a small pullback and to see if the market can take out Tuesday’s highs. If we get that far the bulls may step on the gas and push us along. A digestive day is likely if we can’t break Tuesday’s range to get us into earnings. Data is light again on Wednesday, to leave us with a slower opening most likely.
Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 10:30 Crude Oil Inventory, 3:00 Consumer Credit. Thursday 8:30 Unemployment Claims, 10:00 Wholesale Inventories, 10:30 Natural Gas Storage. Friday 8:30 Trade Balance.
Some earnings for the week (keep in mind companies can change last minute: Wednesday pre market COST, FDO, MON, and after the bell AA, RT. Thursday pre market MAR, PEP, PGR, TSCM and after the bell INFY, NUHC. Friday nothing due out.
NQ (Nas 100 e-mini) Wednesday’s pivot 1697.75, weekly pivot 1681.50. Support: 1689, 1682, 1675-1674.75 fills gap, 1669.75, 1665.25, 1662. Resistance: 1703, 1711.25, 1714.75, 1723.75, 1731.75
TF (Russell 2000 e-mini) Wednesday’s pivot 597.70, weekly pivot 589.30. Support: 591.40, 589.20 fills gap, 588, 584.50, 581.90, 579.60, 577.30, 573.40. Resistance: 599.70, 602.70, 603.50, 604.80, 606.90, 609.20-609.30, 612.60-613.30, 616.