Today's CPI Report to Set Tone

Thursday came in with the northern winds and brought the bulls with them. Wow! S&P 500 hitting six year highs, Dow all time new highs, Nasdaq 100 and Nas Compx still slightly under the November highs (52-week highs) leaving an accumulation day. Volume did outpace yesterdays, but it was still below average. OPEC decided to cut production starting in February 2007, which did not seem to damper the equities markets.

Oil did however rally to close up $1.14 at $62.51. The production cut pushed oil to close at the highest level since December 1^st . Gold fell on the day to close down $1.50 at $630.90.

The semi’s regained support and closed well over the 50dma, which was making the market nervous Wednesday. The semi’s rallying pushed the Nas 100 and Nas composite up out of the triangle. We’ll look for confirmation of the triangle break with a higher close tomorrow. Without that we could be right back in the formations. Banks again closed at all time new highs helping to push the S&P 500 up all day.

Friday brings in big inflationary data with the CPI release in pre market. The data will set the tone for Friday. Thursday went up fast and furious to leave us short term overbought, not exactly what we’d like to see upon quadruple witching. Typically the day is small range with nice volume, but given Thursdays activity and the big data release. We could see something very different. I will look for a move into resistance then a pullback to see the market digest the weeks activity.

Economic data for the Week: Friday 08:30 CPI, 08:30 Core CPI, 08:30 NY Empire State Index, 09:00 Net Foreign Purchases, 09:15 Capacity Utilization, 09:15 Industrial Production.

Some earnings for the Week: Friday nothing of interest.

ES (S&P 500 e-mini) Friday’s pivot is 1434.75, the weekly is 1421.25. Last night we had two possible setups one bullish (the double bottom) and one bearish (the inverted cup and handle). Well the bulls won and the measured move for the double bottom is 1442.25, which was almost met. Look for that level as resistance into Friday. Intra day Support: 1431.25, 1428.50, 1425.75, 1423.75, 1422, 1416.25. Resistance: 1440.75, 1442.25, 1444, 1445.50, 1447.75. 60 minute chart is below.

BKX (Banks) closed +.74 at 116.43. Support: 115.81, 114.06, 113.91 50dma. Resistance: 116.58, 116.97, 117.84 . Daily sector below

Teresa Appleton has traded equities and options for nine years and futures for seven. She is founder and CEO of TradeLogic, LLC. For more information about Teresa and the training she offers stock, options and futures traders, click here.