Sitting on thin ice
Wednesday another green day, but we were split on volume. The Nasdaq was on higher volume leaving an accumulation day while the NYSE was on lighter volume leaving us to rise on light volume.
Crude climbed today up 48 cents to close at $58.76. Prices pushed up after inventories showed another decline for the week. Distillates showed the biggest fall as we near winter this will be closely watched. Gold down again today making four consecutive down days to close at $623.80 -$1.50.
Fed’s FOMC minutes showed that the fed is “uncomfortable†with the current core inflation. Of course these comments were prior to Tuesday’s PPI, but this shows there is huge concern to garner over inflation. Thursday’s CPI will be very closely watched and I feel like a broken record, but it will set the tone for the day. We are on a data release watch kind of market. Any excuse to pullback this somewhat overbought market will pull the string for things.
We are still outside the upper bollingers and oscillators are really climbing to find some nose bleed levels. But when you look at how far we’ve moved in a short period of time with little correction this is all logical. Hitting six year and all time highs for the broader indexes this week along with options expiration, we are volatile and sitting on ice. If heat comes in how quickly will we see this ice start to melt? Profit taking at multi year highs is not a crime! Today’s close left shooting stars on the broader indexes and many major sectors. Showing that the bulls closed us green, but we were well off the highs. Some nervousness in the market and we are reaching a point where the market is not fully fueled to continue to run. So a correction would be healthy.
Along with Thursdays economic data some tech earnings after the bell will be watched. DELL and HPQ forecast for next quarter will be the focus. Microsoft’s Vista delay (which is now suppose to ship to businesses on or before November 30th and January 30th to consumers), but the delays to release was said to slow PC sells, we’ll see if that was fact or fiction tomorrow after the bell.
Some earnings for the Week of November 13 — 17: Thursday pre market — BKS, PLCE, HP, MDTH, SHLD, TOPT, WSM, ZLC, ZOLL and after the bell — CPWM, DELL, DITC, FL, GPS, HPQ, INTU, ISLE, MRVL, MSCC, SBUX. Friday pre market — ANN, KIRK,
Economic due for the Week of November 13 — 17: Thursday 08:30 CPI, 08:30 Core CPI, 08:30 Initial Claims, 09:00 Net Foreign Purchases, 09:15 Industrial Production, 09:15 Capacity Utilization, 12:00 Philadelphia Fed, Friday 08:30 Housing Starts, 08:30 Building Permits.
ES (S&P 500 e-mini) Thursday’s pivot is 1401.25, weekly pivot is 1382. A very dull day with a muted reaction to the FOMC minutes. We look short term overbought and I need of a pullback. If the CPI shows inflation is contained I will look for an up move to exhaust this upside. Then see some pullback and by all accounts that should be on light volume. If the data comes in showing inflation is a concern the market is likely to drop and we could see that on heavier volume to reflect profit taking. So a wait and see attitude is all we have for now. Intra day Support: 1395.75, 1392.50, 1387 and 1385. Resistance: 1403.25, 1407.75 and 1413.75.
BKX (Banks) closed -.35 at 113.85. Support: 113.84, 113.25 50dma,112.52. Resistance: 114.28, 114.91, 115.43.
Good trading to everyone.
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,
click here.