Banks and Retail on Watch, Earnings kick off!
Thursday finished the day green, but on anemic volume. Definitely the pre holiday kind of market. Finished the week up and left us with 4-6 days up depending on which broader market you look at. Financials did not flourish like the semiconductors did throughout the week. Friday the equities markets were closed, but Futures and bonds traded shortened hours. Futures rallied off the jobs data, which could definitely undo any hopes of rate cuts in the near term from the Fed. Futures are also trading a normal Sunday session and are rising as I type this.
This week kicks off earnings season, basically AA leads off the big caps (also a Dow component) and we will see companies start to roll out heavier into next week. Monday is likely to start off with a gap up and could be our exhaustive move. In general five bullish days leaves the market looking for digestion. Keep in mind last week was light volume and holiday played a part. Also keep in mind that good data, meaning less chance of rate cut, has shaken the market. So it leaves us to wonder if Friday had been an open day would we have gapped up and sold off. Will Monday give us that now and give a pullback?
On watch closely this week will be banks (BKX) and retail (RLX). You may remember that last week we were looking at the inverted head and shoulders on the retail sector, which has the neckline right at the 50dma. Through this resistance lets this sector run, we have RTH, GPS, SHLD, COST and HD all on watch. Banks caught a cold last week and sat around congested on the 200dma. This is a critical place for financials to sit and the daily tells me very little. However the 65 minute on the RLX and BKX both could be forming inverted head and shoulders (bullish patterns).
After 14 quarters of double digit growth on the S&P 500 stocks we look to see if the economy is growing. What we have not seen is a lot of companies warning or adjusting expectations. That doesn’t mean they won’t in the next few weeks, but we are definitely still seeing an optimistic bullish market. The VIX dropped all last week, leaving it to sit on the 50dma and 200dma’s. We can still see a little more downside on it before I would look for the bears, but that goes with our we need one more exhaustive upside move on the markets to get there.
Economic Data April 9 – 13 Monday nothing due out, Tuesday 09:30 Fed Governor Mishkin Speaks, Wednesday 10:30 Crude Inventories, 02:00 FOMC Minutes, 02:00 Treasury Budget, Thursday 8:30 Export Prices ex-ag., 08:30 Import Prices ex-oil, 08:30 Initial Claims, 10:30 Natural Gas Report, 11:00 Chain Store Sales, Friday 08:30 Trade Balance, 08:30 PPI, 08:30 Core PPI, 10:00 Mich Sentiment Prel.
Some Earnings for the week: Monday pre market SCHN and after the bell LWSN. Tuesday pre market BKRS, PACT, TTWO and after the bell AA. Wednesday pre market APOL, PGR and after the bell BBBY, DNA, RIMM, RI. Thursday pre market MTG, PII, RAD and after the bell CPWM, LRCX. Friday pre market GE, INFY and after the bell nothing of interest.
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Good for people to know.