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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