Retail Sales Surprise
A surprise this morning from the Retail Sales report, coming in at +0.1% vs. an estimate of -0.4%. PPI also came in a touch weaker on the expected headline rate, but a little bit toward the high end of the range in the core rate.
S&Ps were trading at 1343.50 before the Retail Sales release, and immediately went down to 1334.50. S&Ps now are trading at 1337.
For this market to remain strong we have to spend most of the morning above 1340. On the upside, our targets are 1338, 1340, 1342, 1343.50, a major number at 1345.50, a critical number 1346 and a major at 1347.50. On the downside, we have 1335.50, critical at 1333, small at 1331.50, then 1330, 1328 and a major number at 1327.
NASDAQ was up 27.50 at 2540. As outlined yesterday, 2550-2578 is the absolutely critical zone for this trade. Yesterday’s high was 2577. We have got to get above this area. If we do, again, we have nothing but resistance between 2600 and 2700.
Support is between 2505 and 2490. Under that, look for a move to 2450. Limit downs is 2447.50. Only a trade below 2430 would begin to put yesterday’s action into question.
We have resistance between 2550 to 2578. If we get above that, we’ll have smaller targets on the upside at 2625, then light resistance between 2645 and 2655.
The Dow, which closed up 5 points yesterday, is the same old story. Above 10,800 we like it and below 10,400 we don’t.