Morning Update: 10/17/2012

Will NDX Break Through Or Rollover?

The stock market indices had a very nice follow-up session to yesterday’s rally. They exploded early on, and ran until midday when they pulled back and consolidated. The S&P 500 formed a falling wedge, and the NDX a more regular wedge. They then ran up into the close, and snapped back to retest the session highs to make a nominal new high on the Nasdaq 100 of over 2781 just before the close. The S&P 500 did not make a new high, but reached right up to its old high, before backing off. However, they closed near the session highs for the day.

Net on the day, the Dow was up 127.55 at 13,551.78, the S&P 500 up 14.79 at 1454.92, and the Nasdaq 100 up 38.51 at 2778.38.

Advance-declines were more than 3 to 1 positive onNew York Stock Exchange, and 2 to 1 positive on Nasdaq. Up/down volume was nearly 4 to 1 positive on New York, with total volume of a light 613 million shares. Nasdaq traded over 1.7 billion, and had a 2 to 1 positive volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices gapped up, ran very hard all morning, stalled midday at 2780 NDX and 1456 S&P 500. They consolidated and formed wedges before snapping back late in the day to close near the session high.

It was an excellent day, but the NDX closed right at key overhead resistance from the prior broken support line at 2780. It’s going to be important that it breaks through here, or we may see a rollover and an extension of the decline.

Let’s see what happens tomorrow.

 

Institutional

 

Sectors on the Move:

Sectors stronger than the SPX for Tuesday:
– Basic Materials — Outperformed the SPX by +123%.
– Industrials — Outperformed the SPX by +12%.
– Technology — Outperformed the SPX by +37%.
– Health Care — Outperformed the SPX by +5%.

Sectors weaker than the SPX for Tuesday:
– Energy — Underperformed the SPX by -16%.
– Financials — Underperformed the SPX by -40%.
– Consumer Staples — Underperformed the SPX by -77%.
– Utilities — Underperformed the SPX by -64%.
– Consumer Discretionary — Underperformed the SPX by -13%.

 

Wednesday, October 17

Economics
07:00 MBA Mortgage Purchase Index
08:30 Housing Starts – consensus 770K, prior 750K
08:30 Building Permits – consensus 810K, prior 801K
11:00 Fed to sell $7b-$8b notes in 3-year range
06:00 JPY Machine Tool Orders
08:30 GBP BoE Minutes
08:30 GBP Unemployment
09:00 CHF ZEW Survey
10:00 Italy to sell bills
10:30 Germany to sell EU5b in 2-year notes

Earnings
Before:
Abbott Labs (ABT) EPS $1.28
Blackrock (BLK) EPS $3.29
Black & Decker (DECK) EPS $1.45
US Bancorp (EPS) 73c
Knight Capital (EPS) -$2.45
Bank of NY Mellon (BNY) EPS 55c
Pepsi (PEP) EPS $1.16
Bank of America (BAC) EPS 16c
St Jude Medical (STJ) EPS 81c
After
Stryker (SYK) EPS 99c
American Express (AXP) EPS $1.08
eBAY (EBAY) EPS 55c
SLM (SLM) EPS 54c
Halliburton (HAL) EPS 67c

CPI rose 0.6%, better than the expected 0.5%. Industrial production was up 0.4%, more than the consensus 0.2%. The housing market index came in at 41, in line with expectations.

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