Looking for a Retest of Last Week’s Highs
Friday closed the year with a sell off across the broader markets. Closing on the lows and red for the day, but still managed to close the week green. NYSE had a higher volume day on Friday while the Nasdaq was lower. However, the year had a nice performance, the best in three years. The Nasdaq Composite had the smallest gain on the year at 9.5%, S&P 500 came in next with 13.6% and the Dow the rising star at 16.3% on the year.
Profit taking, end of year house cleaning and even Saddam Hussein could have contributed to Fridays weak performance. A four day weekend hanging over the markets was reason enough, but coupled with the other factors, the sell off was not completely out of left field.
Gold closed up $1.10 at $638.00 on the day. Which is well off the 755.00 we saw back in May, but still up on the year. Crude closed up +.53 at $61.06 on the day. Still some uneasy geopolitical issues and the Houston port could pressure oil, but things are very quiet on that front and keeping the prices closer to $60 than $65.00.
Last week closed green, but remember the prior week was a big drop and we fell off on Friday to leave some interesting looking charts. Wednesday we should see volume return and to find some volatility. Bigger economic news is coming this week and it is a short week starting off the new year. Early on I will look for some upside to retest ranges we left last week. Also to recover some of the losses we saw late Friday. Which really just came on low volume and lack of buying interest. Few profit takers stepped in and probably some nerves ahead of Saddam’s execution. Which so far we’ve not seen any retaliation from, so that ground can look to be covered again.
Financials have been a huge support for the market and the daily is looking ready to pull in here. That will require technology stocks to step up and offset or we’ll see a deeper pullback. A correction on the market early January would not be a bad thing. Would allow for new money to get in the market and for top heavy sectors (banks, brokers etc..) to lighten up some. The range we’ve held for the second half of December will need to break to let this market move. The holding pattern to maintain the big year did it’s job, but not as 2007 starts a correction should be watched for now.
Economic data for the Week of January 1st — 5th Monday US Markets are closed, Tuesday US Markets are closed, Wednesday 7:45 Same Store sales, 10:00 Construction Spending, 10:00 ISM Index, 14:00 FOMC Minutes, 17:00 Auto Sales, 17:00 Truck Sales, Thursday 08:30Initial Claims, 10:00 Factory Orders, 10:00 ISM Services,10:30 Crude and Nat Gas inventories, Friday 08:30 Nonfarm Payrolls, 08:30 Unemployment Rate, 08:30 Hourly Earnings, 08:30 Average Workweek.
Some earnings for the Week of January 1st — 5th Monday US Markets are closed, Tuesday US Markets are closed, Wednesday after the bell BLUD, INTV, SONC. Thursday pre market STZ, MON, MSM, TXI and after the bell ARRO, ESIO, HORC. Friday pre market AZZ, GPN and SGR. Still a very light week of earnings.
ES (S&P 500 e-mini) Wedneday’s pivot is 1430.50 the weekly is 1429.25. Closing right on key support we’ll look for a bounce on Wednesday early. Back over 1436 would be a powerful move to look for a retest of 1444.25 swing high. Intra day Support: 1425.50, 1423.75, 1419.75, 1416.25, 1414.50. Resistance: 1430.50, 1434.75, 1436.00, 1438.75, 1440.25, 1442.25, 1444.25. 13 minute chart is below.
BKX (Banks) closed -1.00 at 117.52. Support: 117.04, 116.20, 115.32. Resistance: 117.98, 118.39, 119.05. Daily sector below
I hope everyone had a great New Years and we start 2007 off on a profitable note!
Teresa Appleton has traded equities and options for
nine years and futures for seven. She is 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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