Financials Held On
Tuesday brought us a very dull day but volume did manage to outpace yesterday’s to leave us with an accumulation day. Green across the board with out our gap and go day, doesn’t make for an easy day, but it did lift the markets. Crude fell to help equities breathe a sigh of relief today. Closing down $1.30 at $64.64 on the day, Prime Minister Blair is saying the next 48 hours will be critical in resolving the dispute with Iran. So oil will be very volatile as this time ticks by and as inventories are released on Wednesday. Gold also fell $1.30 to close at $669.70 on the day.
The broader markets (Nas 100 and composite, S&P 500, Dow) managed to close back over the 50dma today, leaving us with the swing highs from 3/22/07 as resistance just overhead. The banks were on thin ice with the 200dma break Monday, managed to climb back over the 200dma and close green today. This is key and why we always need confirmation of breaks. The bulls were powerful today and held us in a small range after the initial move off the first half hour. Definitely was not fun action and left us sitting a lot. The tight winding action leaves us ready to move into Wednesday.
With the shortened week we have to watch this swing high resistance over head and volume. The Sox (semiconductors) and GHA (hardware) are still below the 50dma and struggling. The Nasdaq did clear this level today, but needs a higher close Wednesday to confirm this strength in the market. We will also need the semi’s to kick in gear and clear that resistance as well. Another sector we have to watch is Retail (RLX) in an inverted head and shoulders with the neckline right at the 50dma. Resistance at 519.28 clears we can look for some retail positions. I have GPS, SHLD, RTH all on watch and tracking the sectors pattern. ANF, COST, HD also can be watched if the sector runs. Rejection of the resistance to move higher will result in failure across the board and set us up for shorts. The same stocks listed will be looked at for those positions. You can look at it like the line in the sand.
Into Wednesday, we can look for a slow opening (unless there is Iran news) and the 10:00 data to get us moving. For now the market is still bias to the upside and we’ll need to test the swing highs and stay over the 50dma (dark green lines on charts below) to continue this strength to the upside. Oil at 10:30 is likely to be of interest to the market and move us along with the data at 10. Early strength is likely to let us see a pullback and find new fuel off the pullback, which is what we’ll be on the look out for.
Economic Data for the week of April 2 – 6 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: 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.
ES (S&P 500 e-mini) Wednesday’s pivot is 1445.75, the weekly is 1433. The inverted head and shoulders we watched for did kick in and rally us, just a lot of the move was off the gap. 1451 overhead is stiff resistance, through that a move into 1455.50 is very likely. A move through 1441.75 would let us look at 1439.50 and on into the open gap that was left unfilled (1433.50 fills it). Intra day support: 1445.75, 1441.75, 1439.50, 1436.50, 1433.50, 1432, 1428.50. Resistance to look for: 1447.75, 1449.50, 1451, 1453.25, 1455.50, 1460. 60 minute chart is below.
BKX (Banks) closed +1.49 at 113.64. Support: 113.25 200dma, 112.78, 112.34, 112.17. Resistance: 113.57, 113.86, 114.47, 115.12. Daily chart below
SOX (semiconductor) closed +3.15 at 468.60. Support: 463.42 (fills gap), 462.85, 457.90 (fills gap), 455.34 200dma. Resistance: 469.46 50dma, 474.82, 475.49 (fills gap), 476.65, 479.84.
If you sat on your hands a lot today, pat yourself on the back and know you are not pressing buttons out of boredom. Today in my chatroom I had an ex floor trader and a current employee of the CME visiting. He is a friend, but was there to trade and the first thing he said to me today at the close, was you are soooo disciplined. It is rare to see and it is amazing to watch, you don’t try to make something happen that just are not setting up. I told him I try to teach patience and that pushing it rarely pays off. The market either sets up or it doesn’t we cannot control that. But as traders what we can control is our actions. So today if you took the back seat and let things setup, congrats to you and YOU are “getting it”.
Teresa, these summaries are awesome
outstanding reads every time…