Why I expect a move up towards resistance

Wednesday left us with a mixed bag.
Volume was heavier on the NYSE, but lighter on the Nasdaq. Nasdaq closed red, so the lighter volume saved it from a distribution day. S&P 500 and Dow closed green, but still well off the highs on the day. Very twist and turn kind of day.

The Dow traded over 12K which was being watched closely. Closed just off that level and that will be watched as well. CPI was inline and didn’t raise the red flag of inflation worries. Crude fell $1.28 to close at $57.65 after three weeks of increased inventories. Gold also down today to close at $592.60 down 90 cents.

Going into Thursday we are filled with good earnings and upbeat outlooks. Still wasn’t enough to rally the semiconductors today or the Nasdaq. Seeing only half the market respond is not enough. We need much more participation from tech. IBM did a nice job holding up and now Apple rallied after the bell today. Plenty of reasons to see things move, but Intel’s cap ex spending cut is a problem and showed today. A lot of data is due on Thursday with the Philly Fed being the biggest piece. So that should provide enough volatility to move through the day and we are nearing options expiration. Seeing positions settle and position ahead of Friday’s expiration was part of today’s volume and that should continue into Thursday. My early bias at this point is we move higher into resistance and pullback. I don’t think we will blow today’s highs off easily and that will be key to higher ground. This could leave us with a fairly neutral day much like today.

Some earnings of interest for the Week of October 16-20 Thursday pre market — BAC, BK, BBT, BBW, C, KO, CAL, CY, LLY, FITB, HON, MCD, NDAQ, NUE, OXPS, BTU, PFE, RS, SAP, POOL, LUV, UNH, UPS, WYE and after the bell — ACS, BRCM, CREE, FNB, GOOG, PMCS, RMBS, RBAK, SNDK, SYNA, XLNX. Friday pre market — MMM, CAT, MRK, SGP, SLB, WL.

Week of October 16th — October20th:
Thursday 08:30 Initial Claims, 10:00 Leading Indicators, 12:00 Philadelphia Fed, Friday nothing due out.

ES (S&P 500 e-mini) Wednesday brought us the volatility for sure. Nice gap up that fell and gave the market a lot of weight. Only to see us rise off the lows and finish slightly green on the day. Pivot for Thursday is 1373.50 and that is the top of the channel that wouldn’t let us get any higher today in the last 90 minutes of trading. It will be a key area to watch for sure into Thursday. Support: 1370.50, a break there would lead us back to 1367.75 and onto 1364. Resistance: 1373.50, 1375.25-1376, 1378.25 and onto 1382.25.

Good trading to everyone.

Teresa Appleton has traded equities and options for
nine years and futures for seven. She 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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