Can we move now? Wednesday we can put down the caffeine.
Tuesday brought a nice up day, still within a narrow range, but nice upside on higher volume than we saw on Monday for an accumulation day. Crude bounced back a little after Monday’s sell off. To close up 38 cents at $61.89 on the day. Gold also popped back today to close up $4.60 at $681.50.
Tuesday’s action showed signs of a waiting market. No catalyst to move us, so we sat in another narrow range day. After the bell Alcoa reported earnings and came in strong. The stock traded up about 70 cents. Futures however are not full of the bull in the after hours and drifting lower as I type commentary tonight. The opening is likely to be slow and quiet, until Crude inventories are released. Then I would think the market once again takes a wait and see approach until the 2:00 data release. That should provide the catalyst to get off the line in the sand action we have been seeing all week. Volume has been light but has slowly increased this week and will be back to normal Wednesday.
The week still has PPI ahead and plenty of other reasons to move. So our slow start should be a thing of the past for us and get this market back on track Wednesday. I would look for a weaker opening and then for buyers. The Dow has had 8 consecutive up days, which is up about 350 points, each time we have seen this type of rise, we drop about 175-200 points. So with Alcoa being out and setting the tone for expectations the market can rest and reset. Which would make sense for a pullback. GE is the next Dow component to report on Friday.
The VIX has dropped for seven days, giving this range bound market a very complacent bullish tone. This would be cause for a pullback for the bulls to rest and let the bears see some correction. The banks (BKX) are back just over the 200dma, after playing up a day and down a day for six days, we need to see some movement off this digestion. FOMC minutes and the Treasury budget should give enough information to give financials a shot in the arm for a move.
Tech was split with the SOX and Software strong on the day leaving hardware behind and in the red. Any negativity in the semi’s will not fair well for the bulls. Intel and AMD have had plenty of news and attention all week, with very little impacting the sector. LRCX reports Thursday after the bell, which should light a fire on the semi’s.
Economic Data April 9 – 13 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: 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.
ES (S&P 500 e-mini) Wednesday’s pivot 1455.50, weekly pivot is 1444.50. Volume picked up some, but still under our average. A break of 1452.50 would lead us to look for 1447.25 and into 1444.25. A test of 1454.5 and 1452.50 and holding there would give big reason to look for buyers. I think we open weaker so looking for that test and hold is where to start the day. Upside through 1457.25 we can look for 1460. Intraday support: 1454, 1452.5, 1450.50, 1448.50 (fills gap), 1444.25, 1442.75, 1438.25, 1433.50. Resistance: 1455.50, 1458, 1460, 1464.75 – 1465.75, 1471.50 and 1477.50.
A reminder to chatroom members and first mention to nightly comment only folks, there will be NO nightly commentary posted Wednesday night. Tuesday night I will post and extend any support/resistance levels I think you might be able to use. The chatroom will be open Wednesday I am out for surgery and should return on Thursday and get back to normal. If you are in any swing trades or positions I have updated those area’s on the site with trading instructions to follow on each play. So please monitor and pre set orders so you are managing them properly. GREAT day to everyone and be patient with the morning, the afternoon is likely to be the trading opp’s.
