Yesterday We Saw Correction On Light Volume

Monday started the week off with a drop across the broader markets to close red. The bears came in on light volume, so this was not a heavy volume sell off. The market started off strong and ended up just off the days lows with the Nasdaq the weakest across the broader markets.

Crude dropped today to come off that $63.00 level we closed with last week. Closing down $1.22 at $62.21 today. Nice warm eastern weather is contributing to the relief in oil prices. Gold fell $1.20 to close at $617.90, still falling after last weeks big drop.

Monday’s market breadth was very heavy and brought the market down slowly. It took the giant awhile to fall. Again this was corrective on light volume. Tuesday’s early economic data should spark some movement and set the days tone. If PPI follows the CPI we won’t see inflation worries and the market should stay the course. Assuming that holds true we should look for some early upside and then possibly retest Monday’s lows. Because the fall was on light volume I’d like to see that retest to insure this holds and buyers come in. Remember we are nearing a holiday and this is our last full week of trading for several weeks. So volume could be spotty at times. Which means we pick our spots and focus on taking low risk setups like we did today.

Economic data for the week of December 18th—22nd Tuesday 08:30 Housing Starts, 08:30 Building Permits, 08:30 PPI, 08:30 Core PPI, 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: Tuesday pre market — CC, MS, SCHL and after the bell CHAP, DRI, PALM. 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) Tuesday’s pivot is 1437, the weekly is 1433.50. A move through 1432 would likely push us down to 1422.75. That doesn’t hold lower ground will be in store. A move to the upside through 1438.25 would let us look for 1441.75 and onto 1444. Intra day Support: 1432, 1430.25, 1427.25, 1422.75. Resistance: 1437, 1439.75, 1441.75 and 1444. 60 minute chart is below.

ER (Russell 2000 e-mini) Tuesday’s pivot is 793, the weekly is 799.10. Intra day Support: 785.8, 782.80, 780.70, 779.60. Resistance: 790.20, 793.20, 797, 799.40. 60 minute chart is below

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
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