Elections to bring needed volatility

  • November 4, 2006
  • Teresa Appleton

Friday closed the week out in the red, also was enough of a drop to leave us RED on the week.  Volume was down on Friday and also down on the week, showing us the pullback this week was on lighter volume than last weeks up week was.

Crude fell hard Thursday to rebound on Friday up $1.26 to close at $59.14.  Which still left it under last weeks close by $1.61.  Gold rose for the third consecutive day to close at $629.20 up $1.40.  UP $28.20 on the week, so look for some pullback early in the week on gold and then a buying opportunity. 

Weekly futures charts along with the broader indexes are still showing we have room for more downside.  SOX put in an inside down week, but everything else expanded to the downside and show more down is still in the works.  Coming into Mid Term elections could cause some volatility and reason to pause in range until after Tuesday.  Healthcare (14.9% of the S&P 500), bio stocks, and stem cell stocks could all be in focus pre and post election. 

Monday even though longer term we have some pullback still in us, I will look for any strength to take us up to Friday’s highs.  Failure to clear first retracements (swing highs left from Friday) would lead us down and through Friday’s lows will be what I look for.  With no economic data Monday and the election Tuesday, look for the news to be focused on who will win the House and Senate, not what the market is doing.  So light volume and tighter ranges with some pockets of volatility should be looked for.

Some earnings for the week of November 6 — 10:  Monday pre market — LEND, AES, OSTK, XMSR, and after the bell — BKHM, ESPD, MNT, NTES, OPTV, OSIP, PTEC, RNWK, SBAC, WGII.  Tuesday pre market — BZH, BIOS, DISH, GDP, IGT, NT, SCHN, THC, TEVA, WCI and after the bell — BBBB, CPE, CECO, CTIC, JCOM, OSIS, TRLG, WYNN.  Wednesday pre market — BRL, BCRX, CVC, DYN, FD, HGSI, RL, SIRI, WGL and after the bell — CELL, CSCO, ERES, NAPS, SNIC, UTSI. Thursday pre market — FS, HANS, JCP, KG, KOSP, TOMO, TOPT, TPTH, TXU, URBN, and after the bell — AIG, BRKS, ECLG, DIET, ENER, EXPE, KSS, SNDA, DIS, WFII.  Friday pre market — IAG.

Economic Data for the week of November 6—11:  Monday no data due out, Tuesday 15:00 Consumer Credit, Wednesday 10:30 Crude Inventories, Thursday 08:30 Export Prices ex-ag., 08:30 Import Prices ex-oil, 08:30 Trade Balance, 10:00 Wholesale Inventories,  Friday no data due out. 

ES (S&P 500 e-mini) Monday’s pivot is 1370.50, weekly pivot is 1373.75.   Friday the ES put a nice floor in at 1368, but it will need through 1371.5 to find the upside.  IF that can happen we should look for the Fridays 1377.25 to test.  If we fail at 1371.50 breaking again, would definitely look for downside into 1361-1359 area.   Intraday Support:  1366.75, 1365.5, 1364, 1361. (completes the head and shoulders measured moved shown on the chart), 1359 (fills the gap).  Resistance:  1371.50, 1374-1374.75, 1377.50, 1379.50, 1383.50, 1387.

Compx (Nasdaq composite)  closed  -3.23  at 2330.79.  Support: 2320.05, 2313.61, 2301.75, 2270.89 50dma.  Resistance: 2342.42, 2349.18, 2360.79, 2365.25, 2379.29. 

Good trading to everyone.