The Nasdaq and SOX at Critical Levels
Tuesday higher volume closed the broader markets with a mixed outcome. The Nasdaq 100 and Nasdaq Composite closed red, but well off the lows on higher volume for a distribution day. The S&P 500 along with the Dow closed green and with an accumulation day. The Dow was also at an all time new closing high. So once again we are seeing tech lag behind and not participate with the big caps.
Crude January contract expired today to roll into the February contract. January closed up 94 cents at $63.15 on the day. February was up 67 cents to close at $63.46. Gold closed up $7.50 at $625.40, breaking the three day losing streak.
Going into Wednesday we are again sitting on the 50dma for the SOX (semiconductors), the Nasdaq is also nearing the 50dma. This will be support to be watched and unless tech will participate this rally will need a pullback. Nas 100 and Nas composite the 50dma’s are also right at the swing lows, which is where a lot of stops will be placed and start fueling some concerns if we drop through that area. Banks are holding strong and even with the PPI showing inflation held strong to close at all time new highs today. I am seeing some divergences on the banks (BKX) so that is a small concern. Brokers (XBD) still look to be working themselves in a triangle, which is winding for a move and resting after the big three reported earnings last week. HMO’s (healthcare) very strong today and trying to break the range from the past seven days.
The strength in the S&P 500 is coming from financials and healthcare, however that cannot be sustained if tech, which also accounts for 14.3% of the index doesn’t participate. Seeing small divergences in banks could be our reason to be cautious on the long side going into Wednesday. With Wednesday being a light economic data day and also light earnings. We could see a lot of digestive activity. The bulls made a nice recovery today and definitely still shows every dip is being bought. So our only missing element is tech and now to watch the banks closely.
Economic data for the week of December 18th—22nd
Wednesday 10:30 Crude Inventories, Thursday 08:30 Chain Deflator-Final, 08:30 GDP-Final, 08:30 Initial Claims, 10:00 Leading Indicators, 12:00 Philadelphia Fed, Friday 08:30 Durable Orders, 08:30 Personal Income, 08:30 Personal Spending, 10:00 Mich Sentiment Rev.
Some earnings due out this week: Wednesday pre market — KMX, FDO, FDX and after the bell CAN, BBBY, COGN, FINL, NKE, PAYX. Thursday pre market — AGE, AM, CCL, GIS, SMSC and after the bell MU, RIMM, SHFL, TIBX. Friday nothing of interest.
ES (S&P 500 e-mini) Wednesday’s pivot is 1434.50, the weekly is 1433.50. Intra day Support: 1436.25, 1434.75, 1432.50, 1431.75 and 1428.25. Resistance: 1440.50, 1442.50, 1444, 1445.50. 60 minute chart is below.
ER (Russell 2000 e-mini) Wednesday’s pivot is 787.20, the weekly is 799.10. Intra day Support: 787.50, 786.30, 784.1, 783.3 and 781.10. Resistance: 790.50, 791.50, 793.5, 795.90. 60 minute chart is below
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