Morning Update 6/29/2012

The stock market indices had a very difficult, ugly opening, and a sharp down session until the last hour to hour and a half, when they came back with a roar.The day started out with futures lower. They spiked down, bounced, formed bear wedges, and dropped even sharper to the morning lows, having dropped from 2565 to 2520, 45 points, on the Nasdaq 100 in just the first hour. The S&P 500 dropped from 1332 down to 1314 and change. Then they bounced back in the morning to test resistance. When that failed, they rolled over and made new lows for the day, forming falling wedges, which indicated it could be a start of a snapback rally. That’s exactly what we got. The NDX exploded from 2510 to 2540, and the S&P 500 went from 1313 to 1330. They closed not far off from those levels, and came way off the lows to close slightly lower on the day. Nevertheless, the technicals would mean the indicators came back sharply on the New York Stock Exchange to close positive, but it was still quite negative on Nasdaq 100.

Net of the day, the Dow was down 24.90 at 12,602.11, 150 points off its low, the S&P 500 was down 2.84 at 1329.01, 16 points off its low, and the Nasdaq 100 down 28.88 at 2536.65 to, 28 points off its low.

Advance-declines were 16 to 13 positive on New York, and 3 to 2 negative on Nasdaq. Up/down volume was slightly positive on New York, with total volume of 850 million shares. Nasdaq traded 1 2/3 billion, and had 3 to 1 negative volume over declining volume.

Stepping back and reviewing the hourly chart patterns, the indices came down sharply, and then into late afternoon were at the lows for the day at the apex of falling wedges. They snapped back in the last hour to hour and 20 minutes, and took back a big chunk of the losses to close down, but only fairly nominally so, except on Nasdaq 100.

Let’s see what this technical snapback off support means, whether it means anything or not.

Friday, June 29

8:30 am: Personal Income, consensus 0.2%, prior 0.2%
8:30 am: Personal Spending, consensus 0.0%, prior 0.3%
8:30 am: PCE Deflator M/m, consensus -0.1%, prior 0.0%
8:30 am: PCE Core M/m, consensus 0.2%, prior 0.1%
9:45 am: Chicago Purchasing Manager, consensus 53.7, prior 52.7
9:55 am: University of Michigan consumer sentiment, consensus 74.4, prior 74.1
11:00 am: Fed to purchase $4.25b-$5.25b notes in 6 to 8-year range
1:30 CNY Industrial Profits
1:30 AUD Private Sector Credit
2:30 CNY HSBC Manufacturing PMI
5:00 JPY Annualized Housing Starts
7:00 CHF KOF Swiss Leading Indicator
9:00 EUR Euro-Zone Consumer Price Index
12:30 CAD GDP

KB Home (KBH) EPS -0.33c, revs 295M

GDP rose 1.9%, in line with expectations. Jobless claims were 386,000, slightly more than the expected 385,000. On Friday we will get personal income, Chicago PMI and consumer sentiment.


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