Prepare for a Volatile Afternoon
Tuesday another day in range for the broader markets. Green closes and rising on light volume was the tone on the day.
The market held and was not in any hurry to move far or fast ahead of the FOMC announcement Wednesday afternoon. Crude rallied on the day to close up $2.96 at $56.97 on the day. Rumors of a Saudi production cut helped fuel that upside move. Gold closed up $1.00 to close at $644.20.
FOMC announcement is due out at 2:15 est Wednesday. No one expects any rate increase or decrease off this two day meeting. However, inflation continues to be key for the Fed and the action taken. The statement could reflect where the change and potential fire works ignite from. Any talk of no further cuts or even the soft landing for an increase would move the market as much as rate change action at this point. The market is wound tightly and ready to spring so the reaction should be volatile.
I have very little bias into the FOMC announcement. Tuesday’s close was strong and left us at the highs, but still in range and not a lot of change this week. The Semi’s are holding in a very tight range with the Nasdaq 100 just under the 50dma and the Nasdaq Comp just over. So this tells us a move will come, but we need Fed Chair Bernanke to give us the reason behind the move and he has been the reason we’ve held in range so far this week. Strong close would lend some upside bias on a normal day, but not into Wednesday. So keeping out of the chop and away from pushing buttons in the boredom will be key until 2:15.
Economic Data for the Week: Wednesday 8:30 Employment Cost Index, 08:30 GDP Adv., 09:45 Chicago PMI, 10:00 Construction Spending, 10:30 Crude Inventories, 14:15 FOMC Policy statement, Thursday 8:30 Personal Income, 08:30 Personal Spending, 08:30 Initial Claims, 10:00 ISM Index, 10:30 Natural Gas inventories, 12:00 Chain Store Sales, 17:00 Auto Sales, 17:00 Truck Sales, Friday 08:30 Nonfarm Payrolls, 08:30 Unemployment Rate, 08:30 Hourly Earnings, 08:30 Average Workweek, 10:00 Factory Orders, 10:00 Mich Sentiment Rev.
Some earnings for the week: Wednesday pre market ACS, AGN, MO, BA, BOT, D, LLY, IR, LLL, NMX, OXPS, PTIE, SEPR, TWX, and after the bell CAI, DLLR, EOG, GILD, GOOG, MCHP, SWIR, SBUX, TUP, VRSN, WEBX, WU, WGL. Thursday pre market AGU, ASD, ADM, BSX, CELG, CLX, EOP, XOM, ITWO, IP, MHO, MRO, MNST, MYL, NUCO, HOT, UTEK, UA, VLO and after the bell AMZN, ANPI, ASYT, ATML, BKHM, CA, ERTS, ISRG, NBIX, ONNN, RACK, VRTX, WEBM, YRCW. Friday pre market AXL, ACI, CVX, ERIC, NYX, R, THQI, WEN. These are just some of the earnings on the week that maybe of interest, also keep in mind they can move without notice.
ES (S&P 500 e-mini) Wednesday’s pivot is 1431.75, the weekly is 1432.50. ES still closing over the 50dma (1426.50), leaving us just over support. Intra day support: 1429.75, 1426.50 (50dma), 1424.50, 1422, 1419.50, 1417.75, 1414.50, 1412.25. Resistance to look for: hgh pill dores not posterior human growth hormone 1434.25, 1437, 1439.50, 1441.25, 1446.50 and 1451. 60 minute chart is below.
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