Will earnings or inflation set the days tone for Tuesday?
Monday brought another gap and go day, heavier volume on this rise for the big caps S&P 500, but not the Nasdaq. Leaving an accumulation day on the NYSE and not the Nasdaq. Financials were the leaders on the day, set by a nice tone off the Citigroup, which also held the biggest gainer on the Dow too. We have a lot of banks and brokers this week reporting, so continue to watch these sectors. Banks did close back over the 200dma, after last week’s break and weak performance. Crude closed down 2 cents at $63.61. Still on edge with the Nigerian elections, but stayed in a narrow range today. Gold closed up $4.60 to close at $694.50 on the day.
Going into Tuesday we have to look at the CPI data. The Fed is concerned about inflation and this is the hot data to watch for how contained inflation is. The data is actually being talked down as possibly being bad and the market will ignore it and look at earnings data. I am not real sure we’ll throw the data aside that easily. Earnings are the focus and will be for several weeks, but we can’t ignore something we’ve done nothing but obsess over for months.
With almost half the Dow reporting this week, many big caps and financials we have a lot on our plate this week. That with options expiration is a lot of volatility. Monday’s gap and go day did very little for me, but did put brokers into short term overbought levels. Pulled the banks back over the 200dma and left the semi’s just under the 50dma. Tech lagged this move, hardware is still behind and with IBM and INTC reporting Tuesday tech will be closely watched after the bell.
We closed with the bulls running the show, the bears are lurking still. So we have to watch CPI and early earnings to set our tone. Also keep in mind we are nearing the years highs on the Nasdaq and Dow, the S&P 500 surpassed the years highs and closed at levels we have not seen since September 2000. Danger of rising to overbought levels and into the resistance with no pullback is a concern now, we need volume to fuel a break out and we have the best chance of seeing that with a pullback.
Economic Data for Week of April 16 – 20 Tuesday 08:30 Phil Fed Reserve Bank Pres Plosser speaks, 08:30 CPI, 08:30 Core CPI, 08:30 Housing Starts, 08:30 Building Permits, 09:15 Industrial Production, 09:15 Capacity Utilization, 10:00 State Street Investor Confidence Index, 12:30 NY Fed Reserve Bank Pres Geithner, Wednesday 10:30 Crude Inventories, Thursday 08:30 Jobless Claims, 10:00 Leading Indicators, 10:30 Natural Gas Report, 12:00 Philadelphia Fed, 03:50 SF Fed Bank Pres Yellen speaks, Friday 12:00 Treasury Secretary Paulson Speaks, 12:15 Fed Governor Mishkin Speaks.
Some earnings for the week: Tuesday pre market AM, AMTD, KO, DJ, JNJ, KEY, PACT, STT, STI, USB, WFC and after the bell CSX, ESLR, IBM, INTC, LLTC, PPDI, STX, USNA, WM, YHOO. Wednesday pre market AOS, ABT, AMR, ASML, BK, DSL, JPM, MOT, PNC, UTX, and after the bell CTXS, CBST, EBAY, GILD, ISIL, MOGN, NVLS, SYK. Thursday pre market MO, ASD, BAC, BAX, BBT, BLK, BOT, CAL, DHR, DHI, FITB, FCS, HOG, HSY, IGT, MRK, MER, NDAQ, NYT, NE, NOK, NUE, OXPS, BTU, DGX, SGP, POOL, SHW, LUV, STJ, TASR, UTEK, UNP, UNH, WCC, WYE, Intraday AXP, After the bell AMD, COF, CERN, CREE, FNB, FDC, GOL,GOOG, ISRG, ZION. Friday pre market CAT, HON, MAN, MCD, PFE, SAP, SLB, WL, WIT, XRX and nothing of interest after the bell. Keep in mind companies can change days and times of reporting last minute so you should check always if you are holding something reporting.
Compx (Nasdaq composite) closed +26.39 at 25.18.33. Support: 2491.94 (fills gap), 2482.17, 2472.35, 2463.76, 2443.62 50dma, 2422.98. Resistance: 2522.63, 2531.42 (years high), 2585.78, 2600.37. Daily chart below
Seat belt in for Tuesdays action early!
