Morning Update: 8/15/2012

The stock market had a volatile day today, but  the indices closing mixed near the flatline.

The day started out with a gap up, back and forth consolidation, which held support, and then led to new multi-week rally highs on the Nasdaq 100, reaching 2742.83. However, the S&P 500 could not take out the early morning highs when it snapped back to 1409 1/2. The early high was 1410.03. They then rolled over in a 3-wave decline, which accelerated into the close. Only in the last 5 – 10 minutes did they snap back to put the Dow in the plus column.

Net on the day, the Dow was up 2.71 at 13,172.14, about 30 points off its low, which occurred in the last few minutes. The S&P 500 was down only .18 at 1403.93, 7 points off its high and 3 points off the low. The Nasdaq 100 was down .89 at 2727.79, 15 points off the high and 6 points off the low.

Advance-declines were slightly negative by 41 issues on New York Stock Exchange, but by 600 issues on Nasdaq. Up/down volume was slightly declining over advancing volume on New York, with total volume of a very light 545 million shares. Nasdaq traded over 1.55 billion, and had a 3 to 2 negative, declining volume over advancing volume.

The ultra-shorts and long were all just narrowly changed, as were the indices. We did get a breakout and a pullback retest off the lows late in the session, but they need to hold. So we’ll see whether they get an up-side follow-through or downside break of support tomorrow, which may be a critical day for the market.

Wednesday, August 15

Economics
07:00 MBA Mortgage Purchase Index
08:30 Consumer Price Index MoM – consensus 0.2%, prior 0.0%
08:30 CPI Ex Food & Energy MoM – consensus 0.2%, prior 0.2%
08:30 Consumer Price Index YoY – consensus 1.5%, prior 1.7%
08:30 CPI Ex Food & Energy YoY – consensus 2.2%, prior 2.2%
08:30 CPI NSA – consensus 229.500, prior 229.478
08:30 Empire Manufacturing – consensus 7, prior 7.39
09:00 Total Net TIC Flows – prior $101.7B
09:15 Industrial Production – consensus 0.5%, prior 0.4%
09:15 Capacity Utilization – consensus 79.2%, prior 78.9%
10:00 NAHB Housing Market Index – consensus 35, prior 35
11:00 Fed to sell $7b-$8b in 2 to 3-year range
08:30 GBP BoE Minutes
08:30 GBP Jobless Claims Change
22:30 NZD Business NZ Performance of Manufacturing Index

Earnings
Before:
Target (TGT) EPS $1.01
Deere & Co (DE) EPS $2.32
Staples (SPLS) EPS 22c
Abercrombie & Fitch (ANF) EPS 17c
After:
Cisco (CSCO) EPS 46c
Netapp (NTAP) EPS 38c
Applied Materials (AMAT) EPS 22c

Retail sales rose 0.8%, better than the expected 0.3%. The PPI was higher by 0.3%, more than the consensus 0.2%. On Wednesday we will get CPI, the Empire State index, industrial production, consensus 0.2%,  home price index and oil inventories.

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