Morning Update: 9/28/2012

A Snapback and 50% Retracement

The stock market indices snapped back today, recovering about a 50% retracement of the previous 2-day sell-off.

The day started out with some backing and filling action, and then they broke out midmorning, ran sharply to resistance, and stalled there. The Nasdaq 100 broke out slightly, getting up to 2827, and the S&P 500 stalled at 1450. Both indices backed off, and backed and filled into the close. The NDX held better than the S&P 500, which backed off into the close.

Net on the day, the Dow was up 72.46 at 13,485.97, 37 points off the high. The S&P 500 was up 13.83 at 1447.15, 3 points off its high. The Nasdaq 100 was up 39.97 at 2821.60, 6 points off its high.

Advance-declines were 3 to 1 positive on New York Stock Exchange, and 3 to 1 positive on Nasdaq. Up/down volume was 5 to 1 positive on New York, with total volume of 620 million shares. Nasdaq traded over 1 2/3 billion, and had a 4 to 1 positive volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices were a little mixed in the morning, but came onto resistance and ran hard midday into early afternoon. They stalled right at resistance near the declining topsline, lateral price resistance, and declining moving averages. There is some formidable resistance just overhead here. We’ll have to see whether this is a technical rebound within a downtrend, or something more substantial.

 

Friday, September 28

Economics
08:30 Personal Income – consensus 0.2%, prior 0.3%
08:30 Personal Spending – consensus 0.5%, prior 0.4%
08:30 PCE Deflator – consensus 1.5%, prior 1.3%
08:30 PCE Core – consensus 1.6% consensus, prior 1.6%
09:45 Chicago PMI – consensus 53, prior 53
09:55 University of Michigan Confidence – consensus 79.0, prior 79.2
11:00 Fed to buy $1.5b-$2b bonds in 25 to 30-year range
23:30 CNY HSBC Manufacturing PMI
05:00 JPY Housing Starts
05:30 EUR French GDP
07:00 CHF KOF Swiss Leading Indicators
12:30 CAD GDP

Earnings
The Finish Line 
(TFL) EPS 44c
Walgreens (WAG) EPS 56c

Pending home sales were down 2.6%, the consensus was for a rise of 0.3%. Durable goods orders were down 13.6%. A reading of minus 5.0% was expected. Initial claims came in at 359,000, better than the expected 376,000 and the final GDP for the second quarter was 1.3%. On Friday we will get personal income, consumer sentiment and Chicago PMI.

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Morning Update: 9/27/2012

The stock market indices had a very steep, sharp decline early on today. That cracked the trendline on the Nasdaq 100, but not so on the S&P 500. Key support at 1440 was taken out, and it reached as low as 1430 today before bouncing, but 1440 on the way up proved futile. The indices rolled over into the close after a 5-wave technical snapback midday. They then backed off in a falling wedge at the end of the day.

Net on the day, the Dow was down 44.04 at 13,413.51, just 7 points off the low. The S&P 500 was down 8.27 at 1433.32, less than 2 points off the low. The Nasdaq 100 was down 22.90 at 2781.63, about 13 points off the low.

Advance-declines were 3 to 2 negative on New York Stock Exchange, and 3 to 2 negative on Nasdaq as well. Up/down volume was a little less than 2 to 1 negative on New York, with total volume of 675 million shares. Nasdaq traded over 1.7 billion, and had a 2 to 1 negative volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices were down very sharply in the morning, until midmorning, when they rallied back in the afternoon to take back about half their losses, but then rolled over into the close to finish with substantial losses and suddenly negative technical.

Institutional

 

Thursday, September 27

Economics
08:30 Initial Jobless Claims – consensus 375K, prior 382K
08:30 Continuing Claims – consensus 3278K, prior 3272K
08:30 GDP QoQ (Annualized) – consensus 1.7%, prior 1.7%
08:30 GDP Price Index – consensus 1.6%, prior 1.6%
08:30 Personal Consumption – consensus 1.7%, prior 1.7%
08:30 Core PCE – consensus 1.8%, prior 1.8%
08:30 Durable Goods – consensus -4.7%, prior 4.1%
08:30 Durable Goods ex Transports – consensus 0.3%, prior -0.4%
08:30 Cap Goods Orders – consensus 0.5%, prior -3.4%
11:00 Fed to sell $7b-$8b notes in 3-year range
1:00 Treasury selling $29b 7-year notes
CNY Leading Index
01:00 NZD NBNZ Business Confidence
01:30 CNY Industrial Profits
07:55 EUR German Unemployment Change
08:30 GBP GDP
09:00 EUR Eurozone Consumer Confidence
23:15 JPY Jobless Rate
23:30 JPY Household Spending
23:50 JPY Industrial Production

Earnings

Before:
Discover Financial (DFS) EPS $1.04
After:
Nike (NKE) EPS $1.13
Global Payments (GPN) EPS 85c
Micron Tech (MU) EPS -22c

New home sales were 373,000, less than the expected 380,000. Oil inventories dropped 2.4 million. Last week they rose 8.5 million. On Thursday we will get durable goods, GDP, jobless claims and pending home sales.

Morning Update: 9/26/2012

The stock market indices suffered steep-rollover losses and closed at the session lows, breaking key support today. The top may be in, so we have to see what kind of follow-through we get. It certainly wasn’t a pretty day today. The session lows were right at the close, and the indices spiked down to them, after trying a late rally.

The day started out, however, with a little gap up, followed by a pullback that held support, and then a new rally to snapback highs at nearly 2859 NDX. The S&P 500 just got up to 1463. They were right up to key resistance, though, and then they backed off. But when they broke the 2-day rising trendline, they accelerated midday, consolidated early afternoon, and then rolled over hard, bouncing the last hour to initial resistance, failing there, and rolling over very hard into the close.

Net on the day, the Dow was down 101.37 at 13,457.55, about 175 points off the high. The S&P 500 was down 15.30 at 1441.86, 22 points off the high. The Nasdaq 100 was down 39.45 at 2804.53, 54 points off its high.

Today was a very big, negative afternoon reversal day.

Advance-declines were a little less than 3 to 1 negative on theNew York Stock Exchange, and 3 to 1 negative on Nasdaq. Up/down volume was 8 to 1 negative on New York, with total volume of 1 billion shares. Nasdaq traded over 1.95 billion shares, and had a 5 to 1 negative volume ratio.

Increasing volume on the down side today is a very bad sign for the bulls.

Wednesday, September 26

Economics
07:00 MBA Mortgage Purchase Index
10:00 New Home Sales – consensus 380K, prior 372K
11:00 Fed to buy $4.25b-$5b notes in 6 to 8-year range
1:00 US to sell $35b in 5-year notes
12:00 EUR German CPI
10:30 Germany to sell EU5b in 10-year notes

Earnings

No major earnings

The Case Shiller home price index rose 0.4%, less than the expected 0.9%. Consumer confidence came in at 70.3, better than last month’s 61.3. On Wednesday we will get oil inventories and new home sales.

Morning Update: 9/25/2012

The stock market indices started out with sharp declines today. They bounced around, and then made a mid-afternoon pullback that held support. When that occurred, they rallied to new snapback highs intraday, making new session highs. They were unable to get above that level, which was the declining topsline in the last two sessions, and pulled back into the close to finish with losses on the day.  The stock market indices had a strange session after a very steep opening gap down, and then further downside movement….

Net on the day, the Dow was down just 20.55 at 13,558.92, the S&P 500 down 3.26 at 1456.89, and the Nasdaq 100 down 17.66 at 2843.98.

It was basically a down morning, consolidation, retest bounce, and pullback close.

Advance-declines were 3 to 2 negative on New York Stock Exchange, and about 13 to 11 negative on Nasdaq. Up/down volume was 3 to 2 negative on New York, with total volume of 600 million shares. Nasdaq traded over 1 2/3 billion, and had a 3 to 1 negative volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices gapped down big time at the opening, bounced around, and when the S&P 500 snapped back to test resistance at 14.58, which is a new snapback high, the NDX was unable to do so. That signaled an orderly pullback retracement and retest, which was successful. That resulted in an afternoon rally, but that failed at the declining topsline, and then they pulled back into the close.

Net-net the indices had a negative start to the week, but they still haven’t broken key-support. We’ll be watching 2833-35 NDX and 1450-52 S&P 500 zones.

Those are the levels to keep an eye on early this week.

 

Tuesday, September 25

Economics
09:00 S&P/Case Schiller City MoM – consensus 0.70%, prior 0.94%
09:00 S&P/Case Schiller Composite YoY – consensus 1.0%%, prior 0.50%
10:00 Consumer Confidence – consensus 63.0, prior 60.6
10:00 Richmond Fed – consensus -6, prior -9
10:00 House Price Index – consensus 0.5%, prior 0.7%
11:00 Fed purchasing $4.5b-5.5b bonds in 8 to 10-year range
1:00 US to sell $35b 2-year notes
GBP Home Prices
06:00 EUR German GfK Consumer Confidence
06:00 CHF UBS Consumption Indicator
12:30 CAD Retail Sales
22:45 NZD Trade Balance
08:30 Spain to sell bills
10:00 Italy to sell inflation-linked bonds

Earnings
Before:
Factset Research (FDS) EPS $1.17
Carnival (CCL) EPS $1.44

The Dallas Mfg. Survey came in at a minus 0.9. Less than the consensus plus 0.5. On Tuesday we will get the Case Shiller home price index and consumer confidence.

 

Weekend Update

The SPX lost -5.62 points during the week (-.38%). The range for the week was 17.09, 1.17%. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 2000) is 82. Pullbacks often occur as this RSI reaches 80 and bounces near 20.

Total tick for the week was 74,000. On the NYSE, the advance/decline line decreased during the week by -1,172 and the 10 day average of Net Advancing decreased by -564. There were 886 New Highs and 38 New Lows.

For the week, Russell 2000 advancing issues (849) totaled 21,245,110 shares traded (25,024 average per stock) and declining issues (1,078) totaled 26,881,631 shares traded (24,937 average per stock.) 1,568 components are on a weekly uptrend (61 new uptrends this week) and 383 components are on a weekly downtrend (122 new downtrends this week.) There were 280 New Highs and 10 New Lows.

For the week, SPX advancing issues (178) totaled 46,760,062 shares traded (262,697 average per stock) and declining issues (320) totaled 90,185,317 shares traded (281,829 average per stock.) 414 components are on a weekly uptrend (14 new uptrends this week) and 86 components are on a weekly downtrend (28 new downtrends this week.) There were 82 New Highs and 3 New Lows.

Notice that both the Russell and the SPX sported twice as many new weekly down trend as new weekly uptrends despite each index having very small weekly losses.

For the week, NASDAQ Composite Index advancing issues (1,530) totaled 44,830,624 shares traded (29,301 average per stock) and declining issues (985) totaled 49,088,556 shares traded (49,836 average per stock.) There were 191 New Highs and 28 New Lows.

Morning Update: 9/21/2012

The stock market indices had a strange session after a very steep opening gap down, and then further downside movement. They then snapped back sharply, paused at resistance, backed off, but held support, and came on again in the afternoon, reaching the session highs with about 35-45 minutes to go. They rolled over hard into the close with about 10 minutes to go, and snapped back sharply in the last 5 minutes to preserve some of the gains on the Dow.

Net on the day, the Dow closed up 18.97 at 13,596.93, just 3 points off the high and about 93 points off the low. The S&P 500 did well to snap back 11 points off the low, down .79 at 1460.26, but couldn’t quite get into the plus column, although it was just a point off the high. The Nasdaq 100 came back 19 points and closed down 2.33 at 2861.70.

So all of the indices snapped back, but only the Dow got back into the plus column.

Advance-declines were still 3 to 2 negative onNew York Stock Exchange, and 3 to 2 negative on Nasdaq as well. Up/down volume was nearly 2 to 1 negative on New York, with total volume of 632 million shares. Nasdaq traded over 1 3/4 billion, and had a 4 to 3 negative volume ratio.

Despite the snapback, we appear to have rallied back to resistance, so it’s going to be key to get a follow-through tomorrow. If they open lower and/or take out today’s lows, the market is in trouble short-term. We’ll have to wait and see.

Stepping back and reviewing the hourly chart patterns, the indices had a big down gap at the opening, followed by a quick bounce, and then lower lows, which turned the market around when the NDX tagged 2842, and change, and the S&P 500 tagged 1450. That resulted in a strong 3-wave snapback. After a late pullback, they snapped back again, and went into the close mixed on the session, narrowly so on all 3 indices. The Dow closed up, while the S&P 500 and Nasdaq 100 closed down today.

We’ll see what happens tomorrow.

Friday, September 21

Economics
No U.S. major economic reports
11:00 Fed to buy $1.5b-$2b bonds in 10 to 20-year range
03:00 NZD Credit Card Spending
08:30 GBP Public Finances
12:30 CAD CPI

Earnings
KB Home 
(KBH) EPS -15c
Darden Restaurants (DRI) EPS 84c

The Philadelphia Fed mfg. index came in at -1.9, better than the expected -4.0. Initial claims were 382,000, more than the consensus 373,000. There are no important economic releases on Friday, but don’t forget the quadruple expiration.

Morning Update: 9/19/2012

The stock market indices had a slightly positive session at the end of the day. It was a little bit choppy, especially since the late rollover took back a big chunk of the gains.

The day started out on the downside. The indices sharply moved up, and then pulled back just as sharply, if not more so. They held support, though, and that triggered an all-day session run into the last hour. At midday, the indices pulled back to test support, but once again, rallied into the last hour, with the Nasdaq 100 having rallied from 2850 to 2871, and the S&P 500 having rallied from 1458 to 1465. However, in the last 45 minutes, they rolled over to take back a big chunk of the gains.

Net on the day, the Dow was up 13.32 at 13,577.96, about 50 points off the high. The S&P 500 was up 1.73 at 1461.05, 4 points off the high. The Nasdaq 100 was up 6.65 at 2864.03, 7 points off its high.

Advance-declines were 17 to 12 positive on New York Stock Exchange, and 13 1/2 to 11 negative on Nasdaq. Up/down volume was 3 to 2 positive on New York, with total volume of a light 630 million shares. Nasdaq traded over 1.8 billion shares, and had a 5 to 4 positive volume ratio.

There was definitely a narrowing of technicals by the end of the day as the market rolled over, on the S&P 500 as well.

Stepping back and reviewing the hourly chart patterns, the indices were down sharply earlier, but rallied into midday, pulled back and then rallied to new highs for the day on the Nasdaq 100 into the last hour, but when the S&P 500 did not confirm, they rolled over hard into the close and gave back a big chunk of the gains. Still, they closed positive on the day, but it was a little disappointing.

Thursday, September 20

Economics
08:30 Initial Jobless Claims – consensus 370K, prior 365K
08:30 Continuing Claims – consensus 3311K, prior 3322K
08:58 Markit US PMI Preliminary – consensus 51.3
10:00 Philly Fed – consensus -3.8, prior -7.1
10:00 Leading Indicators – consensus -0.1%, prior 0.4%
11:00 Fed to sell $7b-$8b notes in 3-year range
1:00 Treasury selling $13b 10-yr TIPS (reopening)
02:30 CNY HSBC Manufacturing PMI
04:30 JPY All Industry Activity Index
05:00 JPY BoJ Monthly Economic Report
06:00 EUR German PPI
06:00 CHF Trade Balance
07:15 CHF Industrial Production
07:30 EUR German PMI
08:00 EUR Eurozone PMI
08:30 GBP Retail Sales
14:00 EUR Eurozone Consumer Confidence
8:30 Spain to sell bonds

Earnings
Before:
Jefferies (JEF) EPS 31c
CarMax (KMX) EPS 51c
Rite Aid (RID) EPS -7c
After
Oracle (ORCL) EPS 53c

Existing home sales were 4.82 million, more than the expected 4.50 million. Housing starts were 750,000, less than the estimated 768,000. Oil inventories rose 8.5 million barrels. Last week they rose 2.0 million. On Thursday we will get initial jobless claims and the Philadelphia Fed mfg index.