Continue to Watch Earnings to Bring Volatility

Wednesday brought the bulls to the table and closed the markets on the highs.  Nasdaq put in higher volume for a nice accumulation day and was the leader on the day full of strength to take out last weeks highs.  NYSE was lower volume, so another day where tech rallied and carried us up, but the big caps followed on light volume.

Crude fell again today down $1.62 to close at $54.02.  Crude inventories came in lower again, while distillates and gas had builds.  This is the lowest level oil has seen in 19 months.  Gold didn’t see any follow through from yesterdays strength and closed down $1.60 on the day at $613.40. 

Going into Thursday economic data picks up some and earnings remain light.  Those that have been released this week are fairly upbeat and helping the overall outlook for growth and giving some indication that the soft landing maybe in place.  Still is a bit early to put the final word on that one, we are just getting started with earnings, so we’ll remain on the fence and let others do the talking.  The upside was strong today, but again we sit at resistance and the advancers to decliners was not showing the strength we need for a lot of conviction and certainty. 

The Nasdaq is nearing the mid December and then early November highs, while the other broader indexes are lagging behind with the Russell 2000 the weakest of them.  SOX is also nearing 78.6% (486.08) fibonacci retracement which is going to be big resistance.  Upside into these highs will take some conviction on the buyers part to push us higher and the A/D line is not showing that kind of participation.  Early strength tomorrow can be watched for weakness and retracement on this rally we had today.

Economic Data released for the Week of January 8th — 12th    Thursday 08:00 NY Fed Bank Pres Geithner to speak, 08:30 Initial Claims, 10:30 Natural Gas inventories, 14:00 Treasury Budget, Friday 08:30 Export Prices ex-oil, 08:30 Import Prices ex-oil, 08:30 Retail Sales, 08:30 Retail Sales ex-auto, 10:00 Business Inventories. 

Some Earnings for the Week of January 8th — 12th   Thursday pre market — INFY, MTB, SRR and after the bell CAMP.  Friday nothing of interest.   Still a fairly light week, but it will start to pick up now.

ES (S&P 500 e-mini) Thursday’s pivot is 1420.50,  the weekly is 1423.50.  The ES is forming a possible double bottom a move over 1425 would confirm the pattern.  The measured move will be 12 points (up to 1437).   The bounce Monday, Tuesday and Wednesday leaves the ES right into 38.2% retracement resistance (1423.50) which will be key for higher ground.  The weekly pivot is at this same spot giving us two pivotal pieces of data along with this double top confirmation in the same area.  Failure here would result in another look at the lower levels 1416.50 and into 1413 again.  Intra day support:  1420, 1418.50, 1416.50, 1415, 1412.25, 1408 1403 (will be key).  Resistance to look for – 1425, 1426.50, 1427.75 (fills the gap), 1429.75, 1432, 1434.25. 60 minute chart is below.

ER (Russell 2000) Thursday’s pivot is 782.70, the weekly is 787.20. The ER like the ES is a possible double bottom, a break over 784.70 will confirm that.  Today’s close was just over that level so we’ll need to be on this early tomorrow with a sign of strength.  The measured move is 11.50 points.  Still holding under 38.2% (786.10) is where we need to see a nice move through to find continuation in the markets upside.   Intra day support: 782,  780.90, 779.40, 778, 776.90, 775.80, 773.20, 771.30.  Resistance:  786.10, 788.40, 790.70, 792.5, 794.00, 795.50 (fills open gap) and 798.30.  60 minute chart below

I hope everyone has a GREAT day.