Patiently Awaiting the Fed

Monday started the week off on a
green note across the broader markets.
However, volume on the NYSE
was lighter but higher on the Nasdaq than Friday. Very cautious tone for the
market ahead of the FOMC announcement due on Tuesday. To follow the dull day
after the bell Texas Instrument
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cut its Q4 forecast, stating weaker than
expected sales. But yet another semiconductor to tell us things are slowing.

Crude fell on the day to close down 81 cents at $61.22. OPEC
meets on Thursday so that could continue to bring in some uncertainty in oil
this week. Warmer than expected weather also helped decrease demand to push
prices lower. Gold still rebounding from last weeks drop to close up $3.80 at
634.80.

Going into Tuesday the FOMC announcement will rule the day.
The opening could have some positioning and it will be where the volume is, but
after that it should quiet down until 2:15. So we’ll be sitting in range most
likely then see the market move once the statement is released. No rate change
is expected, so we’ll stay with that assumption and pay attention to the
language in his statement. Which will be what causes volatility. If Chairman
Bernanke were to change the rates or indicate a change is coming we would see
huge moves, but it is likely we’ll see some volatility and make the market
loosen up some.

Monday was very tight so we’ll stick to no bias into Tuesday.
We should be watchful of semiconductor weakness given the after hours news with
Texas Instruments
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and that could be a weight on the market. Brokers
will also get kick started with Goldman Sachs
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in pre market to give the
broker sector volatility throughout the week. Quadruple Friday is still looming
out there and generally the week is full of twists and turns with a few trend
days mixed in. So Tuesday should kick that off for us.

Economic data for the Week: Tuesday 08:30 Trade Balance, 02:00
Treasury Budget, 02:15 FOMC policy Statement, Wednesday 08:30 Business
Inventories, 08:30 Retail Sales, 08:30 Retail Sales ex-auto, 10:30 Crude
Inventories, Thursday 08:30 Export Prices ex-ag., 08:30 Import Prices ex-oil,
08:30 Initial Claims, Friday 08:30 CPI, 08:30 Core CPI, 08:30 NY Empire State
Index, 09:00 Net Foreign Purchases, 09:15 Capacity Utilization, 09:15 Industrial
Production.

Some earnings for the Week: Tuesday pre market – BBY, DG and
GS and after the bell – ADCT, COO, TUTR. Wednesday pre market — nothing and
after the bell — ZOLT. Thursday pre market — APOL, STST, BSC, COST, LEH, WGO and
after the bell — ADBE, TEK, VSTA. Friday nothing of interest.

ES (S&P 500 e-mini) Tuesday’s pivot is 1426.00, the weekly is
1421.25. Intra day Support: 1424.25, 1422, 1419 and 1416.25. Resistance:
1428.25, 1429.25, 1432, 1436.25, 1441.75 and 1447.75. 60 minute chart is below.

SOX (Semiconductors) closed —1.20 at 476.18. Support: 472.06,
470.78, 466.70 50dma. Resistance: 480.54, 485.39, 488.85, 490.48, 492.50. Daily
chart below:

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
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