Daily Commentary for Friday, February 16, 2007
Written By: Teresa Appleton Stock Forum ID: Teresa
Thursday brings another green day, but today was on light volume. The NYSE and Nasdaq both dropped back under the 50dma for volume. Leaving a lackluster day for traders, but optimism is plentiful with Chairman Bernanke answering questions for another day. The House was pretty hard on him, but it was really more of what the Senators started yesterday and nothing new really. Economic news today was mixed with the Philly Fed coming in with some questionable information. For now the market seems to be ignoring anything bad, on the outside anyway. The light and tight range may say differently.
The Dow closed at another all time new high, S&P 500 at highs we haven’t seen since September 2000. Nasdaq closed on its highs, but that still leaves it under the January highs. Which has left all the key indexes and sectors right into the upper bollingers and at resistance. The RSI is also rising and all key indexes in the high 60’s leaving us very little upside without really pinching this markets head off. We will either have to consolidate or pullback to work this off. Continuing higher is possible, but we would need a catalyst for that and Bernanke is not around tomorrow. Expiration of options coupled with going into the long weekend, statistically is bias to down for the market.
The S&P 500 has only been up 8 times in the last 31 years before Presidents day. 5 of the last 7 options expiration have been down days. So you see the stats favor the bears. The market could use a pullback and the put holders have already been taken to the cleaners so that is little reason to think we race higher. OTHER than the bulls are fighting with all they can find to keep the market making headlines with new highs on the Dow and six year highs on the S&P 500, all that is missing is the Nasdaq making new highs for 2007.
Pre market data is likely to give us direction. Any surprises in the PPI will tell us where we sit with inflation. This could fuel the bulls or the bears, there is no way to know where it will come in. I would expect some pullback tomorrow and then a very quiet afternoon heading into the three day weekend (US markets are closed Monday for President’s day).
Economic Data for the week of February 12 – 16 Friday 08:30 Housing Starts, 08:30 Building Permits, 08:30 PPI, 08:30 Core PPI, 10:00 Mich Sentiment Prel.
Some Earnings for the week: Friday pre market OGE, CPB, GT.
NDX (Nasdaq 100) closed +8.43 at 1823.41. Support: 1819.30, 1798.03, 1784.49 (fills gap), 1778.75, 1763.77. Resistance: 1829.51, 1847.54. Daily chart below
I hope everyone enjoys the three day weekend.
jonny12