Continue to look for entries on pullbacks

  • October 15, 2006
  • Teresa Appleton

The week closed strong and left the Dow at new highs, S&P 500 at 5 ¾ year highs, and the Nasdaq finally putting in a strong week for the biggest gain among the three.  Since the start of the month the Nasdaq has gained 8.9%, S&P 500 8.4% and the Dow 7.8%.  The Dow is getting all the attention because it is at record highs, but it is actually lagging and the Nasdaq is leading the race now.  Friday’s volume was lighter than Thursday’s on the NYSE and Nasdaq.  The weekly volume on the NYSE was lighter than the prior week, but the Nasdaq was higher than the prior week.  Showing the Nasdaq picked up the pace and some interest. 

Crude closed up 71 cents at $58.57, which was lower than last weeks close.  Supply cut by OPEC could still come, but that isn’t putting any pressure on price.  Our inventory data has been very good, so until we see any signs of shortage talk of cutting supply will likely not pressure anything.  Gold rallied on Friday up $12.40 giving the week a nice boost to close at $592.70. 

Monday we will look for a move higher then the pullback to come in.  Earnings really pick up this week and enough economic data to keep volatility in the market for us.  We will look at several options strategies on earnings due, I think semi’s along with internet’s will take center stage this week.  The Dow will be very active with many Dow components reporting, so we may also work with some DIA options this week. 

Some earnings of interest for the Week of October 16-20:  Monday pre market — ASYT, SCHW, ETN, WB and after the bell — OSI, PPDI, SONC.  Tuesday pre market — BOT, FRX, JNJ, KEY, MER, STT, UTX, USB, WFC and after the bell CNW, IBM, ILMN, INTC, LLTC, MOT, NVLS, SOV, SYK, YHOO.  Wednesday pre market — ABT, ASML, BSX, CIT, GD, JPM, and after the bell — AMD, ALL, AMLN, AAPL, COF, CTXS, CSX, CBST, ET, EBAY, GILD, ISIL, KMI, NVEC, RYL, SSTI, STLD, WM, WSTL.  Thursday pre market — BAC, BK, BBT, BBW, C, KO, CAL, CY, LLY, FITB, HON, MCD, NDAQ, NUE, OXPS, BTU, PFE, RS, SAP, POOL, LUV, UNH, UPS, WYE and after the bell — ACS, BRCM, CREE, FNB, GOOG, PMCS, RMBS, RBAK, SNDK, SYNA, XLNX.  Friday pre market — MMM, CAT, MRK, SGP, SLB, WL. 

Week of October 16th — October20th:  Monday 08:30 NY Empire State Index, Tuesday 08:30 Core PPI, 08:30 PPI, 09:00 Net Foreign Purchases, 09:15 Capacity Utilization, 09:15 Industrial Production, Wednesday 08:30 Building Permits, 08:30 Core CPI, 08:30 CPI, 08:30 Housing Starts, 10:30 Crude Inventories, Thursday  08:30 Initial Claims, 10:00 Leading Indicators, 12:00 Philadelphia Fed, Friday nothing due out. 

ES (S&P 500 e-mini) on the chart below you can see three pushes.  Each is fairly symmetrical and you see that the third push up is nearing resistance and the pullback if symmetry remains intact would likely be 12-14 points.  1378.25 would be nice resistance to look for up here and then the pullback.  Last weeks low was 1351 and the high 1374.75 and we now have the weekly pivot at 1366.50.  So given that if we hit the 1378.25 resistance and pullback to the weekly pivot that gives us the 12ish point pullback on our third leg up.  Which is what we will watch for going into Monday and look for higher into resistance then a pullback.  Monday’s pivot is 1372.25.

Good trading to everyone.

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