Daily market commentary for Tuesday, October 3rd, 2006

Monday starts the week off with extremely light volume.  Which is pretty normal after the end of the quarter, but it was also Yom Kippur, which is always takes the volume out of the market.  So we finished the day with a light volume sell off. 

Crude closed the day down $1.88 at $61.03.  Venezuela and Nigeria are threatening to cut production as the price continues to drop.  That didnt seem to rock the market, a threat seems to be considered empty at this point.  Gold closed lower down 90 cents at $603.30 on the day. 

ES (S&P 500 e-mini) closed the day down on Monday.  Weekly data:  H= 1350.50, L=1321.50 and C=1345.50.  Weekly pivot and support resistance data:  PP=1339.25, R1 1356.75, R2=1368.25 R3=1397.25 and S1=1327.75, S2=1310.25, S3=1281.25.   Pivot for Tuesday is 1342.75.  The downside was pretty accelerated today due to light volume and lack of buying.  We needed correction and a pullback, doing that on light volume is the best case scenario for the bulls.  We touched the weekly pivot 1339.25 as the days lows and just over the fib support 1339.  This is significant support to hold and a break here will lead to a much lower move.  Likely to see a move down to 1327.25 sooner rather than later if we break this 1339 support.   Support 1339, 1335.50, 1332 and 1327.25.  Resistance 1342.75-1343.50, 1346.25, 1348.00, 1350.50 and 1352.25. 

The market will need to catch its breath today.  We saw weakness in banks and brokers early on and then the semi’s decided to join the party to pressure the market further.  Market breadth was negative with the U/D and A/D both in negative territory for a big part of the day.  The TRIN also 1.29 quite bearish.  I know it was light volume, but the daily and 60 minute charts are still showing that we can move lower.  We are just over the 200dma on the NDX and COMPX (dark blue line on charts below) so that will be key and likely the spot we see some buying come in.  So I will look for that to hold us and then some rally off it.  We are still in an uptrend and we are still capable of moving lower, but with the 200dma nearing we need to be watchful of an up day given the two consecutive down days we’ve had on light volume. 
Week of October 2 – October 6   Tuesday 00:00Auto Sales, 00:00 Truck Sales, Wednesday 10:00 Factory Orders, 10:00 ISM Services, 10:30 Crude Inventories, Thursday 08:30 Initial Claims, Friday 08:30 Average Workweek, 08:30 Hourly Earnings, 08:30 Nonfarm Payrolls, 08:30 Unemployment Rate, 15:00 Consumer Credit.

Some earnings for the Week of October 2^nd  – October 6^th  Tuesday pre market PBG, SMSC and after the bell LWSN.  Wednesday pre market RPM, WWW and after the bell BLUD, MU, VTS.  Thursday pre market CMN, STZ, HELE, MAR, MTRX, MERX, MTN and after the bell SLR.  Friday nothing expected out. 

Lets look at some charts:
NDX (Nasdaq 100)  closed –21.32 at 1632.81.  Support:  1626.70 200dma, 1624.83, 1617.64, 1612.10 and 1589.77.  Resistance:  1644.44, 1666.03, 1680.52, 1701.98  and 1721.13.

Compx (Nasdaq composite)  closed  -20.83  at 2237.60.  Support:  2225.22, 2222.17 200dma, 2217.91 and 2195.52.  Resistance:   2249.90, 2258.82, 2265.11, 2273.30, 2297.91 and 2317.86. 

Good trading to all!
Teresa