These 2 sectors are leading the market

  • October 23, 2006
  • Teresa Appleton

Monday came out of the gate weak but picked up steam and finished the day in the green.  It was a light volume day, so this dip was not bought as heavily as those we’ve seen over the past six weeks.  The SOX (semiconductor sector) closed green but still just under the 50dma also still sitting just over the swing low support. 

Crude left another red day down 52 cents at $58.81.  Leaving oil on a 15 month low as weather starts to change and OPEC remains uncertain for supply cuts or leaving the supply alone.  Gold also tumbled today down $13.50 to close at $582.90, $600 proving itself to be the wall of worry after rejecting that resistance late last week. 

After the bell the tone turned negative with Texas Instrument (TXN) reporting they expect a slow down.  Another slap in the face for the semi’s and one they did NOT need.  TXN is a component in the S&P 500 and also a SOX component, will leave some weight on the market going into the opening.  Which will keep the semi’s in our focus for help with market direction. 

Tuesday expect a weak open and again we will have to watch the Semi’s (SOX) and Banks (BXK) closely.  Financials are usually quiet ahead of the FOMC and with the meeting starting on Tuesday things could quiet down. Monday we saw nice strength in the banks and brokers, which combined make up 20.7% of the S&P 500.  There are enough earnings pre market and after the bell to keep things moving, but our range may narrow.  So be cautious and look for a slow open with no economic data.  Look for KLAC after the bell on Tuesday to see if the semi’s curse continues.

Economic data for the Week of October23rd — October 27th:  Tuesday nothing due out, but the FOMC two day meeting starts, Wednesday 10:00 Existing Home Sales, 10:30 Crude Inventories, 14:15 FOMC Policy statement due out, Thursday 08:30 Durable Orders, 08:30 Initial Claims, 10:00 Help Wanted Index, 10:00 New Home Sales, Friday 08:30 GDP-Adv, 08:30 Chain Deflator Adv., 09:50 Mich Sentiment Rev.

Some earnings due out this week (remember you should verify any data, it can change quickly):  Tuesday pre market — AKS, ALK, AMTD, EAT, CP, CME, COH, CFC, DD, JBLU, LXK, LU, MDC, PCAR, PD, TZOO, USG, and after the bell — AMZN, CTX, ESLR, ESRX, FLEX, GNSS, IDTI, KLAC, PNRA, QLGC, STX, TIN, ULTI, WBSN, XTO.  Wednesday pre market — MO, BIIB, BA, CRA, CL, GM, HET, IMCL, PFCB, TASR, WMI, WLP, WY, during market hours BUD and after the bell — AEIS, AFFX, BOBJ, CRUS, ERES, LSI, MTH, MCHP, PHM, SFNT, USPI, VAR, WMGI, ZMH.  Thursday pre market — EYE, AET, BMY, CELG, CRDN, COP, CNX, XOM, LLL, LIZ, MEDI, MSTR, MLNM, PENN, QLTI, SEPR, S, HOT, LCC, XMSR,  during market hours THI, WEN and after the bell — CNXT, ELX, GOL, ISRG, IRBT, LSCC, MSFT, ONNN, PLAY, SOHU, SUNW, UHS, VSEA, WEBX, WEBM, YRCW.  Friday pre market BHI, CAH, COCO, CVH, OS, SPSX and after the bell — LPNT.

ES (S&P 500 e-mini) Mondays close was just off the highs, however as I type this the globex session is still drifting lower.  Weekly pivot of  1373, which is now equal to 61.8% from Monday’s range (low to high).  Tuesdays pivot is 1378.50, which at this point could end up being the lows on the overnight session and about where we open on Tuesday morning.   My bias going into Tuesday’s open will be to watch for downside then find a range to stay in.  With the FOMC meeting results on Wednesday we are likely to really quiet on Tuesday and up until the announcement Wednesday afternoon.  The second half of the week should pick up in range and volatility with one third  of the S&P 500 reporting this week.    Support:  1379, 1377.25, 1375.50, 1373, 1371, 1367.75 and onto 1364.  Resistance:  1382.25, 1383.25, 1384.50, 1386 and 1388. 

Good trading to everyone.