Monday Recap, Tuesday Outlook
Written By: Teresa Appleton Stock Forum ID: Teresa
Monday started the week off on a green note across the broader markets. However, volume on the NYSE was lighter but higher on the Nasdaq than Friday. Very cautious tone for the market ahead of the FOMC announcement due on Tuesday. To follow the dull day after the bell Texas Instrument (TXN) cut its Q4 forecast, stating weaker than expected sales. But yet another semiconductor to tell us things are slowing.
Crude fell on the day to close down 81 cents at $61.22. OPEC meets on Thursday so that could continue to bring in some uncertainty in oil this week. Warmer than expected weather also helped decrease demand to push prices lower. Gold still rebounding from last weeks drop to close up $3.80 at 634.80.
Going into Tuesday the FOMC announcement will rule the day. The opening could have some positioning and it will be where the volume is, but after that it should quiet down until 2:15. So we’ll be sitting in range most likely then see the market move once the statement is released. No rate change is expected, so we’ll stay with that assumption and pay attention to the language in his statement. Which will be what causes volatility. If Chairman Bernanke were to change the rates or indicate a change is coming we would see huge moves, but it is likely we’ll see some volatility and make the market loosen up some.
Monday was very tight so we’ll stick to no bias into Tuesday. We should be watchful of semiconductor weakness given the after hours news with TXN and that could be a weight on the market. Brokers will also get kick started with GS in pre market to give the broker sector volatility throughout the week. Quadruple Friday is still looming out there and generally the week is full of twists and turns with a few trend days mixed in. So Tuesday should kick that off for us.
Economic data for the Week: Tuesday 08:30 Trade Balance, 02:00 Treasury Budget, 02:15 FOMC policy Statement, Wednesday 08:30 Business Inventories, 08:30 Retail Sales, 08:30 Retail Sales ex-auto, 10:30 Crude Inventories, Thursday 08:30 Export Prices ex-ag., 08:30 Import Prices ex-oil, 08:30 Initial Claims, Friday 08:30 CPI, 08:30 Core CPI, 08:30 NY Empire State Index, 09:00 Net Foreign Purchases, 09:15 Capacity Utilization, 09:15 Industrial Production.
Some earnings for the Week: Tuesday pre market – BBY, DG and GS and after the bell – ADCT, COO, TUTR. Wednesday pre market – nothing and after the bell – ZOLT. Thursday pre market – APOL, STST, BSC, COST, LEH, WGO and after the bell – ADBE, TEK, VSTA. Friday nothing of interest.
ES (S&P 500 e-mini) Tuesday’s pivot is 1426.00, the weekly is 1421.25. Intra day Support: 1424.25, 1422, 1419 and 1416.25. Resistance: 1428.25, 1429.25, 1432, 1436.25, 1441.75 and 1447.75. 60 minute chart is below.
SOX (Semiconductors) closed –1.20 at 476.18. Support: 472.06, 470.78, 466.70 50dma. Resistance: 480.54, 485.39, 488.85, 490.48, 492.50. Daily chart below
