Daily market commentary for Wednesday, Dec 13, 2006
Written By: Teresa Appleton Stock Forum ID: Teresa
Tuesday finished the day in the red on higher volume, leaving a distribution day across the broader indexes. The red finish was well off the lows and still showing the bulls are not rolling over easily. The Fed didn’t close the door on future rate increases and definitely still on the inflation watch tower. Chairman Bernanke is an inflation hawk and will continue to watch each data release to determine the economies health. CPI on Friday will be additional data to be concerned with, it is a piece of inflation measurement.
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Crude fell 20 cents to close at $61.02. Gold also down $3.10 to close at $631.70. Oil is still a little jittery ahead of OPEC’s meeting on Thursday and with oil inventories due out Wednesday. This should be closely watched sector. With the Fed staying the course, gold will also see increased volatility. Inflation worries seem to add value to gold.Â
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The Nasdaq Composite, Nas 100 and the Dow are still in symmetrical triangles, while the S&P 500 sits just off the November 2000 highs. The semiconductor sector is sitting just over the 200dma and 50dma, a test and failure there would be negative on tech and push the Nasdaq down out of those triangles. Banks hit an all time new high today and also closed at an all time new closing high. Brokers took on some heat today with GS disappointing the high expectations, they did well, just not impressive enough for the street. Thursday BSC and LEH both report so we’ll continue to look at that sector. Financials make up 20.7% of the S&P 500, so those two are critical for direction on the SP’s.Â
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Going into Wednesday my bias is slightly negative. With less critical economic data, Wednesday maybe quiet. Digest the fed’s action and leave the market for a move later in the week. I don’t think Wednesday will be dead, just quiet at time. The CPI is Friday and the market is already looking forward to that and quadruple witching on Friday.Â
Economic data for the Week:Â Â 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.
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Some earnings for the Week:  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.
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ES (S&P 500 e-mini) Wednesday’s pivot is 1423.00, the weekly is 1421.25. The chart below we have two possible patterns, unfortunately one is bullish and the other bearish. No one ever said this was EASY!  Let’s start with the bulls, possible double bottom confirmed with a move over 1429.25 and the measured move would be 1442.25. The bears are looking at this possible inverted head and shoulders, break of 1416.25 puts it in motion. The measured move is 1400.50. Intra day Support: 1424, 1422, 1418.50, 1416.25 and 1412. Resistance: 1428.25, 1429.25, 1432, 1436.25, 1442.25 and 1447.75. 30 minute chart is below.
SOX (Semiconductors) closed –3.35 at 472.83.  Support: 472.06, 470.78, 467.09 50dma. Resistance: 480.54, 485.39, 488.85, 490.48, 492.50. Daily chart below dark green line is 50dma, dark blue is 200dma
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