Market Inflation Obsession

Posted by Teresa
April 12, 2007 at 7:40 pm

Thursday started the day off weak only to reverse and finish on the highs. Volume was a little lighter than Wednesdays for the NYSE and NAsdaq, leaving a very lack luster afternoon for traders. Dribbled up was about all we had to work with. With a light volume rise we have reason to be worried, because WednesdayÃ¢â‚¬â„¢s sell off was on the highest volume we have seen in the past nine sessions. Showing us that a lack of buyers and conviction still remains in this market. Crude closed up on the day at $63.85 +1.84. After the draw down off WednesdayÃ¢â‚¬â„¢s data that left oil volatile today and bullish. Gold dropped $2.00 closing at 679.70 on the day.

Well here we are with one day left on the week and the market has yet to leave this range. We are up one day and down the next, keeping us in range. PPI data due in the pre market will set the tone for the day and likely to overshadow big cap GEÃ¢â‚¬â„¢s pre market earnings release. Since inflation is the focus or maybe I should say obsession with the Fed, this data is our biggest of the week.

Knowing PPI will set the tone it is hard to have any bias into the data. But I am slightly bias to the bears for the day, that would change if the data gives the market a really upbeat tone. Without the tone changing my overall bias will be slightly bearish. It could be just another zig zag day to close our week out. That has definitely been the weeks action and going into Friday there maybe little reason to see that change.

Next week will bring a busier earnings week, options expiration and more inflation data. So things should find the volatility and shake us out of the range weÃ¢â‚¬â„¢ve managed to maintain this week.

Economic Data April 9 Ã¢â‚¬â€œ 13 Friday 08:30 Trade Balance, 08:30 PPI, 08:30 Core PPI, 10:00 Mich Sentiment Prel.

Some Earnings for the week: Friday pre market GE, INFY and after the bell nothing of interest.

Compx (Nasdaq composite) closed +21.01 at 2480.32. Support: 2468.03, 2459.96, 2442.06 50dma, 2422.26 (gap fill), 2417.94, 2408.57, 2401.45. Resistance: 2488.65, 2497.76, 2504.52 fills gap. Daily chart below