Market Commentary for Tuesday, April 3, 2007
Monday closed on lighter volume than we had on Friday across the broader markets with narrow range days slightly green. Market held off a disappointing ISM number and managed to hold onto support with a weak Nasdaq. Gold closed up $2.50 at $671.50 on the day. Crude closed up 17 cents to close at $66.04. Nice end of day drop off Iran coming out and saying they are basically willing to work on a release without a trial of the 15 naval personnel.
With the broader markets closing slightly green today it left us with narrow range and a lot of inside bars. The SOX and banks did not close well and banks even broke the 200dma today. Which leaves us cautious on financials going into tomorrow. Remember financials (banks and brokers) make up 20.7% of the S&P 500, so these are big sectors. Brokers are just over the 200dma (230.32), but banks are weaker off the sub prime lenders scare today with New Century filing for bankruptcy. We could see some spill over across the sectors with this. The semi’s are under the 50dma and over the 200dma in the range they’ve become comfortable in. Brokers get in motion we’ll want to keep an eye on Goldman (GS) for puts.
Because of the support we did hold and the narrow range I am slightly bullish into Tuesday. However, any break of Monday’s lows will turn that quickly. Long lower shadows on the candles and the range, give me that little we can see a pop early feeling. But we’ll need tech and financials to get far or do much. So keep an eye on them and don’t let this get away from us. With no economic data all we’ll be watching for is Iran and any statements from them to move things around. This means we could see a quiet day to wind up for Wednesday and Thursday volatility. The VIX is looking as though it can still see some downside which also favors the bulls slightly.
Economic Data for the week of April 2 – 6 Tuesday 17:00 Auto Sales, Wednesday 07:00 MBA purchase Applications, 10:00 Factory Orders, 10:00 ISM Services, 10:30 Crude Inventories, Thursday 08:30 Initial Claims, 10:30 Natural Gas Report, Friday US markets closed for Good Friday (early futures trading only, no equities) 08:30 NonFarm Payrolls, 08:30 Unemployment Rate, 08:30 Hourly Earnings, 08:30 Average Workweek, 10:00 Wholesale Inventories, 15:00 Consumer Credit.
Some Earnings for the Week: Tuesday pre market ISCA, POP, after the bell OXM, RBN. Wednesday pre market BBY, CC, MON and after the bell BLUD, LWSN, MU. Thursday pre market STZ, MTRX and after the bell RSTO, WDFC. Friday nothing of interest.
BKX (Banks) closed -1.71 at 112.15. Support: 111.71, 111.48, 110.84, 110.39, 109.10. Resistance: 112.61, 113.23 200dma, 113.57, 113.86, 114.47. Daily chart below.
XBD (brokers) closed -.28 at 234.28. Support: 233.90, 231.37, 230.32 200dma. Resistance: 236.09, 237.08, 238.04, 238.99, 240.35. Daily chart below
Remember sometimes the market churns and grinds, so don’t get in a hurry to push trades. Wait for them to setup and don’t get in a hurry.
