Daily market commentary for Wednesday, Oct 4, 2006

Teresa

Posted on Tue 3rd Oct, 2006 10:07:19 PM

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Written By: Teresa Appleton Stock Forum ID: Teresa

Tuesday started weak and rallied off those lows.  Holding the 200 day moving average on the Nas 100 and Nas Composite that I highlighted last night.  The weakness into those levels was turned around by the bulls with a vengeance .  I haven’t seen that horrid of market breadth turned around in along while.  So bravo to the bulls today.  Volume also gets a “bravo” on the day leaving accumulation days for the NYSE and Nasdaq.  Our two day light volume pullback seems to have done the job to find some players and close the Dow at a new record high.

 
Crude, my goodness, fell another $2.35 on the day to close at $58.68.  You have to think the shorts are getting VERY nervous with that 59.00 level dropping.  This is the weakest level we’ve seen since July 2005.  High inventories are contributing to no pressure, so with data due Wednesday, lets watch this closely.  The OIH is nearing 78.6% fib support at 119.21, we DEFINITELY need to watch that level and if it holds some upside should be watched (short term).  We break that level 115.67, 112.60, and 105.45 are the next big support levels.  Gold also could not find a bottom today with a fall of $21.80 closing at $581.50. 

 
For Wednesday some movement could come off oil inventories and ISM data.  The only thing that bothers me from today’s rally is the semi’s were weak and closed red still.  Also the CCI made a lower move while price closed higher on the broader indexes.  Small amount of divergence for us and financials leading today was a small problem.  After hours somewhat negative but nothing from any big stocks, so we shouldn’t feel the heat from that like we did off MRVL today.  The resistance overhead is strong, so I will look for further pullback off the open and to see if the dip is being bought.  Tech will have to participate and lead or we won’t get far up here.  Big data to come on Thursday and Friday so look for Wednesday to find some quiet periods throughout the day.

 
ES (S&P 500 e-mini) closed the day up on Tuesday.  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 Wednesday is 1342.50.  We dipped under that 1339 support briefly the first hour, but the index managed to rally from there and didn’t look back.  Support 1341.50, 1339, 1335.50, 1332 and 1327.25.  Resistance 1347.50, 1350.50, 1352.25 and 1354.50. 

Week of October 2 – October 6   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   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 +7.48 at 1640.29.  Support:  1626.40 200dma, 1624.83, 1617.64, 1612.10 and 1589.77.  Resistance:  1644.44, 1666.03, 1680.52, 1701.98  and 1721.13.

SOX (Semiconductors) closed –4.97  at 448.28.   Support:  447.65, 439.39 and 432.22.  Resistance:  453.25, 467, 470.63, 478.55 200dma.

Good trading to everyone.
Teresa