Daily market commentary for Tuesday, Sept 26, 2006
Written By: Teresa Appleton Stock Forum ID: Teresa
Monday started the week off with a bang, nice green day after a very weak opening. Volume was also up and left us with an accumulation day on the NYSE and Nasdaq. S&P 500 at a 5 ½ year high, with the Dow also knocking on the highs from May which you may remember was a hop skip and jump from all time highs. Will the market rest here and double top with tech lagging back or can this market take hold and rally. Which would dispel the old adage of September is a HORRID month for the markets. Well here we are in the final week and things are looking pretty perky. We still have a lot of week ahead of us though, so don’t go putting the cart before the horse.
Crude fell under $60.00 temporary at a 10 month low before rebounding and closing at 461.45 up 90 cents on the day. Other energy sectors are also suffering and dropping with Nat. gas at a three year low. Keep an eye on XLE and OIH as possible plays for the energy and oil sectors. XLE has support at 50.00 from the June 13th lows followed by the next big level at 48.20. Monday’s holding of 50.00 could give it a boost back up to 52.27 and even 53.88. But should be played short term with energy seeing very little relief from selling pressure. OIH came off the support down near 120 today which could lead to another pop early Tuesday, but again with the selling pressure in these sectors you have to pick your upside carefully. 119.21 is good support on the OIH, with resistance at 125.48 and onto 129.25 area. A break of 119.21 would leave us to look down into 107.83 longer term downside so keep that in mind. Gold found a few legs today with its green day closing up 50 cents at $595.50.
Tuesday we are likely to open at resistance, this is pretty strong overhead and a pullback could do the job for picking up some buyers. Today we saw the Nasdaq lead the turn around, but didn’t see that carry through as the S&P 500, S&P 100, along with the Dow made new highs and powered through resistance, the Nasdaq 100 and Nas composite both did not find that power. They did however pick up some steam but we still left the day with some divergence and that is our problem now going into Tuesday. I have to be leery of this and say pulling back into 38.2% across the board would get things in synch and allow the market to breath. Would avoid becoming short term overbought and also pick up some pullback buyers. Some folks (like me) are worrisome about buying break outs until we see the Nasdaq leading the way. So early pullback with probably a very slow opening and then see things pick up after 10:00 consumer confidence is out. But we could see a pretty quiet day with bigger pieces of data to come and end of month/quarter upon us. So don’t get in a rush to put money to work, something always comes out way!
ES put in a green day after a week start on the day. V bottom reversal to get the rally running. The week the pivot is 1329 with a daily pivot on Monday of 1325, which played well today. Tuesday’s pivot is 1332.50, which convergent with a 38.2% pullback on the ES. So this will become key, pullback to test support and then resume should be watched off this level. A break of the 1332.5 would leave us to look lower down to 1325 with some levels of less importance ahead of that. Support: 1332.50, 1330.50, 1328.25, 1326.5 and 1325. Resistance: 1340, 1342.25, 1345 and 1350.75.
Some earnings for next week of interest: Tuesday pre market LEN and after the bell JBL, RHAT. Wednesday pre market MKC and nothing after the bell. Thursday pre market AM, FDO and after the bell CAN, ESIO, RIMM, TXI. Friday pre market MAG.
Economic data: Week of September 25th – September29th Tuesday 10:00 Consumer Confidence, Wednesday 08:30 Durable Orders, 10:00 New Home Sales, 10:30 Crude Inventories, Thursday 08:30 Chain Deflator-Final, 08:30 GDP-Final, 08:30 Initial Claims, 10:00 Help-Wanted Index, Friday 08:30 Personal Income, 08:30 Personal Spending, 09:50 Mich Sentiment Rev, 10:00 Chicago PMI
Lets look at some charts:
NDX (Nasdaq 100) closed +28.00 at 1650.37. Support: 1627.79 200dma, 1623.43, 1617.64, 1606.29, 1578.76. Resistance: 1651.00, 1680.52, 1701.98 and 1721.13.
Good Trading to all!
Teresa
