Light Volume Was a Breather

Wednesday brought us a light volume pullback to close red across the broader markets. Volume was incredibly light for equities as well as futures. Last night I wrote that we needed a breath taking day, finally that came our way. Basically to pullback on lighter volume is not eroding or damaging the upside, it is helping it. We have to pullback to pick up buyers and interest in the market. As long as the drops are on lighter volume it is healthy.

Crude inventories came in with bullish data, but price still stayed pretty tight today. Closing up 24 cents at $62.19 on the day. Gold falling under pressure to close down $12.00 at $635.90.

Thursday should bring more volatility. I will look for early downside and for volume to come in and show us the dip buyers. They should be lurking for a pullback, which we really need a deeper pullback. Wednesday was a nice start, but continuation into Thursday ahead of the jobs data would be nice to see. That would leave us at a position to look for buying after the Friday’s jobs data release. Again we need to see the pullback on light volume and any buyers coming in needs to come from the Nasdaq as well as the S&P 500. We can’t continue to see the Nas lag and we really need the SOX to move through the 492.50 resistance.

Banks and brokers should see some activity but limited ahead of the FOMC next week. Interest rate talk always curtails those sectors and with Tuesday right around the corner keep that in mind as we lurk under resistance. Those will also be hard sectors to swing any trades in until after the meeting. But with options expiring next week we should see plenty of good opportunity after Tuesday afternoon.

Economic Data for the Week of December 4-8:

Thursday- 08:30 Initial Claims, 03:00 Consumer Credit

Friday- 08:30 Nonfarm Payrolls, 08:30 Unemployment Rate, 08:30 Hourly Earnings, 08:30 Average Workweek, 10:00 Mich Sentiment Prel.

Some earnings for the week of December 4-8:

Thursday pre market- AHCI, CRMT, CIEN, FILE, JOSB, MOV, TOPT, TTC and after the bell ATW, CENT, CMOX, ESL, NSM, SHFL, PAY.

Friday pre market BKRS.

ES (S&P 500 e-mini) Thursday’s pivot is 1426.75 for the March
2007 contract. Intra day Support: 1424, 1423, 1421.75, 1419.50. Resistance:
1426.50, 1428.50, 1429.50, 1430.75, 1432.44 .

Teresa Appleton has traded equities and options for
nine years and futures for seven. She founder and CEO of TradeLogic, LLC. For
more information about Teresa and the training she offers stock, options and
futures traders,

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