Intel Down, Pre-Market PPI Data Meets Consensus

Tuesday brought the digestive day we were expecting. However, it was a split day the Nasdaq 100 and Nasdaq Composite were both red and on slightly higher volume leaving a distribution day. The S&P 500 and Dow both green, but on lighter volume. Remember we don’t want to rise on light volume, we want volume to support the bulls not leave them hanging by a thread. We all know it only takes one snip to cut that string and a freefall to show up. Leaving the markets to close nervous ahead of
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. Which we expected as well.

Now did INTC put the market to rest? Well it traded down about a buck, some margin problems, but nothing really big beyond that. Tuesday pretty much gave us the rest and digestion we needed after Thursday and Fridays run up. Thursday the Semi’s rejected 78.6% and we looked at that closely. Still seeing weakness there and now with INTC down in after hours we are very likely to open weak Wednesday. However the pre-market inflation data (PPI) could change anything. But as it stands I am looking for early weakness and for the market to pull in some. The small caps were weak Tuesday but the rest of the market held up well. The brokers left a nice shooting star on the daily, this could indicate we are tiring and in need of a breath, which would of course impact the S&P 500. A lot of banks are reporting this week and Fed speakers so this will also impact.

Options do expire on Friday and being a shortened week we can look for some nice ranges. Tuesday started us with a rest and that was expected. But the fireworks should come in. As all the broader indexes are piercing the upper bollingers and we are at resistance this would be a nice time to see a pullback. A gap up could be exhaustive, but as I sit and look at charts tonight I don’t see how we will manage a gap up because INTC is down a buck and the semi’s were weak all day along with the
NASDAQ being red at the close. So this narrow range we left unless the data shoots us up in the pre-market, we should look for an early drop.

Crude fell $1.78 on the day to close at $51.21. Talks of a production cut is getting the thumbs down from the Saudi oil minister (so far). So there is still no pressure on the price and we are seeing a weak market hang around that lower $50.00 mark. Gold dropped today after Friday’s rally, to close down $1.00 at $625.90 on the day.

Economic Data for the week of January 15 — 19 Wednesday 8:30 PPI, 08:30 Core PPI, 09:00 Net Foreign Purchases, 09:15 Industrial Production, 09:15 Capacity Utilization, 13:00 Housing Market Index, 13:00 Fed Reserve Gov Mishkin to speak, 14:00 Fed’s Beige Book, 14:50 SF Fed Reserve Bank Pres Janet Yellen to speak, 17:30 St Louis Fed Bank Pres William Poole to speak, Thursday 08:30 CPI, 08:30 Core CPI, 08:30 Housing Starts, 08:30 Building Permits, 08:30 Initial Claims, 10:00 Leading Indicators (isn’t confirmed), 10:00 Fed Chairman Bernanke to speak before the Senate, 10:30 Crude Inventories, 12:00 Philadelphia Fed, 16:30 Money Supply, Friday 08:00 Fed Bank President Lacker will speak, 10:00 Mich Sentiment Prel/Consumer Sentiment, 10:30 Natural Gas report, 01:15 Kansas City Fed Reserve President Hoenig to speak

Some earnings due out for the Week:
Wednesday pre market ASML, CIT, JPM, LEN, PH, PGR, LUV, STT, WIT and after the bell AAPL, LRCX, NVEC, SOV, WM. Thursday pre market AIT, BK, CMA, CAL, FITB, HOG, IGT, MER, NVS, PPG, UNH and after the close COF, CREE, ETFC, FNB, IBM, ICOS, XLNX. Friday pre market C, FAST, GE, KEY, MOT, SLB, STI and WL.

This was the first week in 6 weeks that the ES did not test the weekly pivot on Monday. So that means we need to look for it still into Tuesday.

ES (S&P 500 e-mini) Wednesday’s pivot is 1439, the weekly is 1431.50. 1436 held us well, a break there should allow us to look for amove into 1431.50 and even 1430.50. Upside we have 1444.25 as big resistance which we have sat under for days. Up though 1440 and to 1444.25 and even up to 1447.5 should cover us for any upside if that 1440 opens up. Intra day support: 1437.75, 1436, 1433, 1430.50. Resistance to look for: 1440.75, 1442, 1443.75, 1444.25, 1447.50, 1453. 60 minute chart is below.

Teresa Appleton has traded equities and options for
nine years and futures for seven. She is founder and CEO of TradeLogic, LLC. For
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