Morning Update: 2/16/2012

4:13 am…

Market indices suffered a fall today, led by Apple Inc. (AAPL), of all things. Apple, which spiked up to new all-time highs this morning, reaching over 526.00, spiked down under 500 to 497.67, giving back 11.79 in the afternoon. That was quite the reversal on a monstrous 53.3 million share traded. That does not auger well for stocks and we’ll see what kind of follow-through to the downside it gets over the next two days.

The day started out with a gap up, and the indices ran hard in a 5-wave advance, reaching over 2600 on NQ and 1358 on the ES. But then they abruptly plunged in the afternoon. That was followed by a bounce around FOMC, and then another pullback. They stabilized around 2565 NQ and 1344-45 on ES, but then drifted lower into the close, not far off the session lows.

Net on the day, the Dow was down 97.33 at 12,780.95, 27 points off its low, but more than 118 points off its high. The S&P 500 was down 7.27 to 1343.23, 12 points off its high. The NQ fell 19.23 to 2556.01. It was over 2600 at one point, so that was a 45-point reversal today, and closed near the session lows at the end of the day.

That kind of close, coming off new multi-year highs, such as is the case with NQ, does not auger well for stocks. If we gap down tomorrow, or come down sharply, we may have ended the rise. We’ll have to see how that goes.

The ultra-long Direxion Daily Small Cap Bull 3X Shares (TNA) dropped 1.59 to 59.16, and the Direxion Daily Financial Bull 3X Shares (FAS) lost 1.31 to 86.84, although it was much higher earlier in the session before the market pulled back.

No trades today.

News:                                                                                                                                                                                                                                                                                                                                                 Forecast                        Previous

08:30  USD Initial Jobless Claims 364K 358K
08:30  USD PPI (MoM) 0.3% -0.1%
08:30  USD Continuing Jobless Claims 3550K 3515K
08:30  USD Housing Starts 0.68M 0.66M
08:30  USD Building Permits 0.68M 0.67M
08:30  USD Core PPI (MoM) 0.1% 0.3%
09:00  USD Fed Chairman Bernanke Speaks
09:45  USD Bloomberg Consumer Confidence -41.7
10:00  USD MBA Delinquency Rates (YoY) 7.99%
10:00  USD Philadelphia Fed Manufacturing Index 8.4 7.3
10:30  USD Natural Gas Storage -126B -78B

Looking to manage ZB open position.  This week’s action has been weird and most of the moves that matter have occurred in the Globex session as of late.  Being that tomorrow is Thursday and on Friday I trade lightley I will not be looking for anything amazing to happen tomorrow. As everyone is waiting for some type of resolution out of Greece. We may see this muted, news driven, volatile  market for a while. Tomorrow will be very interesting. We’ll have to see if trend lines and moving averages hold on the hourly charts. That’s the key here!

Olof Thomas


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