Watch the SOX for market direction
Thursday marked the 19th anniversary of the 1987 crash as well as the Dow closing over 12, 000. Volume was split today with the NYSE being higher than yesterday and the Nasdaq being lower. That marks two days with this split and is showing lack of participation in tech (nasdaq).
Crude ended the day up 85 cents to close at $58.50. The slow rise was due in part to OPEC meeting to cut production, the Saudi oil Minister voiced his support of this cut and the price started rising. Gold futures also up today to close at $602.50 up $9.90. We’ll keep an eye on this, but now that the 600 level is back in play we may see some speculation and buyers come in. Remember GLD tracks gold futures so we play it like a stock (ETF) and the leverage is the same as you use for stocks. So you don’t have the commodities leverage exposure that way. The 50dma 59.70, is the last big resistance to clear until 61.25.
Thursday after hours was pretty upbeat with a few exceptions. Semi’s again taking the heat and down off SNDK and RMBS reports. Today the SOX closed right on the 50dma and a break of today’s low (444.13) would confirm dropping the 50dma and a double top. This would be very bad for the Nasdaq if this sector moves lower. Given the RMBS and SNDK action we could see early weakness. INTC and AMD have already taken a toll on this sector and earlier in the week the rejection of the 200dma. Tech is 48.4% of the Nasdaq 100 and 14.3 % of the S&P 500, we need the semi’s to see the market move forward, so keep a close watch on this into Friday.
Friday we could see a pretty quiet day. Wednesday and Thursday left us with narrowing ranges and split volume. Semi’s are lagging and pulling the Nasdaq with it, with no big news on Friday we could see options expire with a whimper. A quiet low volume Friday would leave the market in range and set for a move after the FOMC meeting next week. The two day meeting starts on Tuesday, so the quiet before the storm is setting in. Market breadth for the past two days was also very flat and neutral and a weak start tomorrow then a move into mid range to close the week should be watched for.
Some earnings of interest for the Week of October 16-20 Friday pre market — MMM, CAT, MRK, SGP, SLB, WL.
Week of October 16th — October20th:
Friday nothing due out.
ES (S&P 500 e-mini) Thursday was less than exciting, it was just dull. Maybe it was me, but I don’t think so. This grind for two plus hours in a three point range is just NOT for me. Friday we have no economic data and Pivot for Friday is 1373.00. 1371-1374 is just the grind zone and now the pivot is mid level. I will look for a move outside of this range, I will look to open at the lower end of that range off early weakness and for the bulls to step in to take us up out of it. Wednesday and Thursday left us in that zone for hours, so it will not be likely and to stay in it would keep the market range bound and quiet. Which maybe the tone of Friday, so don’t force trades and watch that area closely. Support: 1371 a break there would lead us back to 1367.75 and onto 1364. Resistance: 1374, 1375.25-1376, 1378.25 and onto 1382.25.
Everyone have a great week and enjoy the weekend, next week should be a nice trading one after FOMC.
Teresa Appleton has traded equities and options for
nine years and futures for seven. She founder and CEO of TradeLogic, LLC. For
more information about Teresa and the training she offers stock, options and
futures traders,
click here.