Morning Update: 11/7/2012

Solidly in Plus Column … But Key Overhead Resistance Ahead

The stock market indices had a tremendous rally late morning that, despite the afternoon pullback, put them solidly in the plus column today.

The day started out with some backing and filling action. Actually there was an early dip on the Nasdaq 100, but the S&P 500 held up very well. Late morning when they broke through the 1424 area on the S&P 500, the S&P 500 and NDX both surged sharply, rallying in a spike-up mode, taking the NDX all the way up to 2696.46 and the S&P 500 to 1433.38. They then pulled back rather dramatically, especially on the Nasdaq 100, giving back about 20 quick points, and about 7 points on the S&P 500. They did manage to firm up a little bit into the close.

Net on the day, the Dow was up 133.24 at 13,245.68, 45 points off the high. The S&P 500 was up 11.13 at 1428.39, 5 points off its high but still a good gain. The Nasdaq 100 closed up 8.14 to 2681.05, about 15 points off its high, so basically, the NDX did not perform today.

Advance-declines were 21 to 9 positive on the New York Stock Exchange, and 2 to 1 positive on Nasdaq. Up/down volume was nearly 5 to 1 positive on New York, with total volume of 654 million shares. Nasdaq traded just under 1 3/4 billion and had a 3 to 2 positive volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices went back and forth in the morning forming wedges, then broke out late morning, spiked up right around noon to reach the session highs, and then pulled back in the afternoon rather dramatically, only to bounce into the close to preserve some of the gains.

It was a nice day, indeed, but still, we remain below key-overhead resistance levels now at 2702 on the NDX and around the 1333-4 level on the S&P 500.

Let’s see what happens after today’s election.

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Morning Update: 10/25/2012

A Decisively Negative Day

The stock market indices had a rough day today, despite big gap ups at the opening. The Nasdaq 100 opened strong and moved up to yesterday’s midday highs, but couldn’t get through the 2686 area. The S&P 500 popped to 1420 resistance, and both failed right there. They immediately sold off, particularly the NDX, which dropped dramatically just before the noon hour from 2686 down to 2655. That’s 31 points lower. The S&P 500 fell in a 3-step fashion from 1420 to 1412. They then bounced midday, and formed rising wedges. The FOMC announcement caused some volatility, and the wedges were broken to the downside. They fell steadily into the close before bouncing a bit, only to back off again, but they all closed down on the day.

Net on the day, the Dow was down 25.19 at 13,077.34, 14 points off the low and 80 points off the high. The S&P 500 was down 4.36 at 1408.75, 1 1/2 points off the low and 12 points off the high. The Nasdaq 100 lost 10.47 to 2655.55, 2 points off its low and 31 points off its high.

Advance-declines were 16 to 13 negative on theNew York Stock Exchange, and 13 to 10 negative on Nasdaq. Up/down volume was 2 to 1 negative on New York, with total volume of 641 million shares. Nasdaq traded 1.9 billion, and had a 11 to 7 negative plurality.

Stepping back and reviewing the hourly chart patterns, the indices opened sharply higher, immediately sold off midday, took out support lows on the NDX, but not on the S&P 500. That encouraged traders to buy, but wedges formed, and they were broken in the afternoon. The S&P 500 closed right near yesterday’s lows, and the entire low pullback, as did the NDX.

So we’re in a precarious position here, because any lower levels and we can see a dramatic sell-off. At that point, it may result in a bigger snapback rally, because we will probably be getting oversold enough for a better rally to ensue.

 

Institutional

Thursday, October 25

Economics
08:30 Initial Jobless Claims – consensus 371K, prior 388K
08:30 Continuing Claims – consensus 3260K, prior 3252K
08:30 Chicago Fed National Activity Index – consensus -0.2, prior -0.87
08:30 Durable Goods Orders – consensus 6.8%, prior -13.2%
08:30 Durable Goods ex Transports – consensus 0.9%, prior -1.6%
08:30 Cap Goods Orders Nondef Ex Air – consensus 0.3%, prior 1.1%
08:30 Cap Goods Shipments Nondef Ex Air – consensus 0.5%, prior -0.9%
10:00 Pending Home Sales – consensus 2.0%, prior -2.6%
11:00 Kansas City Fed – consensus 5, prior 2
11:00 Fed to buy $4.5b-$5.5b notes in 8 to 10-year range
1:00 US selling $28b in 7-year notes
08:30 GBP GDP
21:45 NZD Trade Balance
23:30 JPY CPI
9:30 Spain to sell 3, 4, 10-year bonds
10:30 UK to sell 7-year bonds

Earnings
Before:
Procter & Gamble (PG) EPS 96c
Dow Chemical (DOW) EPS 37c
Starwood Hotels (HOT) EPS 53c
CME Group (CME) EPS 70c
Hershey (HSY) EPS 86c
Coca-Cola (KO) EPS 69c
International Paper (IP) EPS 77c
Raytheon (RTN) EPS $1.27
ConocoPhillips (CP) EPS $1.19
After
Eastman Chemical (EMN) EPS $1.42
Amazon (AMZN) EPS -10c
Apple (AAPL) EPS $8.87

The home price index rose 0.7%, better than the expected rise of 0.4%. Oil inventories increased by 5.9 million barrels, last week they were up 2.9 million. On Thursday we will get durable goods, initial jobless claims and the Kansas City Fed mfg. index.

Morning Update: 10/23/2012

 

Slightly in the Plus Column

The stock market indices had a tremendous rally in the last hour that brought them back into the green, but the day started out quite negatively in down channels where they went all day, making new lows for the pullback on the NDX near 2672. The S&P 500 dropped all the way down to 1422, and in the last couple hours, bounced to resistance, backed off and formed a right handed extended V-pattern. When the last pullback held, they then took off and then accelerated. Short covering set in late in the session, with the NDX jumping from 2672 to 2698, and the S&P 500 from 1422 to 1434. They backed off just a tad into the close.

Net on the day, the Dow was up 2.38 at 13,345.89, 90 points off the low. The S&P 500 was up .62 at 1433.81, nearly 12 points off its low. The Nasdaq 100 up 16.24 at 2694.56, 23 points off its low.

Advance-declines were negative by only 75 issues on theNew York Stock Exchange, and about 13 issues on Nasdaq. Up/down volume had a slight plurality to the downside on New York, with total volume of 610 million shares. Nasdaq traded over 1.6 billion, and had a slight plurality to the upside.

Stepping back and reviewing the hourly chart patterns, the indices jumped early, backed off, made new highs early in the session, but then came down in a 3-wave decline from those highs and spiked down into the lows just after the lunch hour. They then snapped back in a big late rally, putting the indices back in the plus column, which was not a surprise since they were extremely oversold.

We’ll see what kind of follow-through we get tomorrow.

Institutional

 

Averages

Tuesday, October 23

Economics
10:00 Richmond Fed Manufacturing Index – consensus 4, prior 4
11:00 Fed purchasing $7b-8b notes in 2.5 to 3-year range
11:30 US to sell 4-week bills
1:00 US selling $35b 2-yr notes
00:00 AUD Conference Board Leadin Index
08:30 GBP BBA Loans for Home Purchases
12:30 CAD Retail Sales
13:00 CAD Bank of Canada Rate Decision
14:00 EUR Eurozone Consumer Confidence

Earnings
Before:
Harley-Davidson (HOG) EPS 58c
Regions Financial (RF) EPS 21c
DuPont (DD) EPS 47c
Coach (COH) EPS 76c
Xerox (XRX) EPS 25c
UPS (UPS) EPS $1.06
Whirlpool (WHR) EPS $1.60
After:
Netflix (NFLX) EPS 5c
Altera (ALTR) EPS 46c
Juniper Networks (JNPR) EPS 17c
Norfolk Southern (NSC) EPS $1.23
Aflac (AFL) EPS $1.66
Broadcom (BRCM) EPS 77c
3M (MMM) EPS $1.65

There were no important economic statistics released on Monday. On Tuesday we will get the Richmond Fed mfg. index.

 

Morning Update: 10/19/2012

NDX, GOOG, A Real Drag On The Indices

The stock market indices had a nasty session, particularly the Nasdaq 100. Google Inc. (GOOG) earnings were released early accidentally by publisher R.R. Donnelley midday. They had a low estimate, and the stock got crushed for 75 points, and then trading was halted. That included Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Priceline.com Inc. (PCLN) and many other Nasdaq 100 market leaders. Although they did get a snapback in the last hour, the NDX closed down for the day.

Net on the day, the Dow was down 8.06 at 13,548.94. The S&P 500 was down 3.57 at 1447.34, about 5 points off the low and 7 points off the high, so midrange. The Nasdaq 100 closed down 31.45 at 2744.17, about 10 points off the low.

Advance-declines was slightly negative by about 75 issues on the New York Stock Exchange, and almost 2 to 1 negative on Nasdaq. Up/down volume was a little less than 4 to 3 positive on New York, with total volume of about 700 million shares. Nasdaq traded over 2 billion, and had a 2 to 1 negative volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices moved lower at the opening, bounced, and then made lower lows only to snap back to the session highs and new rally highs on the S&P 500 at 1464. The NDX, at that point, was far from its high and it caused a rollover, acerbated by Google. Net, net it was a negative day on the indices.

We’ll see what that means, but we certainly backed off key overhead resistance at 2780 late yesterday and again today when we got back up to 2775.

It’s not the prettiest sight in the NDX. There’s some weight here.

Institutional

Friday, October 19

Economics
10:00 Existing Home Sales – consensus 4.75M, prior 4.82M
11:00 Fed to sell $750m-$1.1b TIPS in the 2 to 4-year range
02:00 NZD Credit Card Spending
05:00 JPY Leading Index
06:00 EUR German PPI
08:30 GBP Public Sector Borrowing
12:30 CAD CPI

Earnings
Before:
McDonald’s (MCD) EPS $1.48
Honeywell (HON) EPS $1.14
General Electric (GE) EPS 36c
Baker Hughes (BHI) EPS 84c
Wynn Resorts (WYNN) EPS $1.34
Schlumberger (SLB) EPS $1.06

Initial jobless claims were 388,000, worse than the expected 365,000. The Philadelphia Fed mfg. survey was 5.7, better than the consensus 0.5. On Friday we will get existing home sales.

Morning Update: 10/18/2012

Mixed Day With Positive Technicals

The stock market indices had a mixed close, but a volatile session. The Nasdaq 100 moved down fairly sharply at the opening, while the S&P 500 actually firmed up. They then both turned around and ran sharply to reach the session highs on the NDX early in the morning, and then pulled back. Falling wedges have appeared for both of them to try another high. They did, and the S&P 500 broke out to new highs at 1452, but the NDX couldn’t confirm. They both rolled over hard early afternoon. When secondary support held, they rallied back sharply only to fall back again in the last 20-30 minutes.

Net on the day, the Dow was up 5.07 at 13,556.85, 5 points off the high and 90 points off the low. The S&P 500 was up 5.99 at 1460.91, slightly off the high and 7 points off the low. The Nasdaq 100 was down 2.76 to at 2775.62, 9 points off the high and 15 points off the low.

Advance-declines were 20 1/2 to 9 positive onNew York Stock Exchange, and almost 3 to 2 positive on Nasdaq. Up/down volume was nearly 3 to 1 positive on New York, with total volume of 670 million shares. Nasdaq traded nearly 1.7 billion, and had flat volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices were down early, came back sharply, pulled back to retest and rallied to the session highs just before the lunch hour. They rolled over in the afternoon, snapped back sharply, only to pull back again into the close, and closed positive on the Dow and S&P 500, but negative on the Nasdaq 100.

It was a mixed day with positive technicals.

 

Institutional

 

Leaders

Thursday, October 18

Economics
08:30 Initial Jobless Claims – consensus 365K, prior 339K
08:30 Continuing Claims – consensus 3275K, prior 3273K
10:00 Philly Fed – consensus 0.0, prior -1.9%
10:00 Leading Indicators – consensus 0.2%, prior -0.1%
11:00 Fed to buy $1.75b-$2.25b notes in 25 to 30-year range
1:00 US selling $7b in 30-year TIPS (reopening)
01:30 CNY China Property Prices
02:00 CNY Industrial Production
02:00 CNY Real GDP
02:00 CNY Retail Sales
08:30 GBP Retail Sales
12:30 CAD Wholesales Sales
9:30 Spain to sell 3, 4, 10-year bonds
10:30 UK to sell 7-year bonds

Earnings
Before:
BB&T (BBT) EPS 72c
Keycorp (KEY) EPS 21c
Traveler’s Insurance (TRV) EPS $1.51
Cypress Semiconductor (CY) EPS 20c
Southwest Airline (LOVE) EPS 13c
Fifth Third Bancorp (FITB) EPS 39c
Phillip Morris (PM) EPS $1.39
Morgan Stanley (MS) EPS 25c
Verizon (VZ) EPS 65c
Union Pacific (UNP) EPS $2.17
After
Chipotle (CMG) EPS $2.29
Capital One Financial (COF) EPS $1.75
Riverbed (RVBD) EPS 25c
Microsoft (MSFT) EPS 59c
Google (GOOG) EPS $10.54
Sandisk (SNDK) EPS 33c
Etrade (ETFC) EPS 8c
Advanced Micro Devices (AMD) EPS -17c
Blackstone (BX) EPS 41c

Oil inventories rose 2.9 million barrels, more than last week’s 1.7 million. Housing starts were 872,000, better than the expected 765,000. On Thursday we will get initial jobless claims and the Philadelphia Fed mfg. survey

 

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.

Morning Update: 10/16/2012

 

Week Starts Off With A Bang

The stock market indices started off the week with a bang, and although they gapped up and then pulled back, support did hold. That prompted a mid morning rally that got up to resistance, but twice midday they failed there, and pulled back, though in an orderly 3-wave, corrective fashion, and held the late morning pull-back lows. When that occurred, they took off again in the afternoon, broke out above key 3-day resistance at 2735 NDX, and ran up to 2743 area. The S&P 500 jumped late in the day from 1434 to 1441, and then backed off finally at the close.

Net on the day, the Dow was up 95.38 at 13,424.23, the S&P 500 was up 11.54 at 1440.13, and the Nasdaq 100 close up 19.73 at 1739.87.

Advance-declines were 2 to 1 positive on New York Stock Exchange, and almost 3 to 1 positive on Nasdaq. Up/down volume was nearly 3 to 1 positive on New York, with total volume of just under 600 million shares. Nasdaq traded over 1.5 billion, and had a 3 to 1 positive volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices were up early, pulled back sharply to test support, but held, and then ran up to resistance and also held. Backing off by midafternoon, they held support, came on and broke out, and closed near the highs for the day going away.

That was an excellent start to the week. Let’s see how tomorrow goes.

Good Trading!

 

Institutional

 

Tuesday, October 16

Economics
08:30 Consumer Price Index YoY – consensus 1.9%, prior 1.7%
08:30 CPI Ex Food & Energy – consensus 2.0%, prior 1.9%
08:30 CPI NSA – consensus 231.360, prior 230.379
09:00 Total Net TIC Flows – prior $73.7B
09:00 Net Long-term TIC Flows – prior $67.0B
09:15 Industrial Production – consensus 0.2%, prior -1.2%
09:15 Capacity Utilization – consensus 78.3%, prior 78.2%
10:00 NAHB Housing Market Index – consensus 41, prior 40
11:00 Fed purchasing $4.5b-5.5b notes in 8 to 10-year range
11:30 US selling $25b in 52-week bills, 4-week bills
08:30 GBP PPI
08:30 GBP CPI
09:00 EUR Eurozone CPI
09:00 EUR German ZEW Sentiment
11:00 EFSF to sell 6-month bills
12:00 Greece to sell 91-day bills

Earnings
Before:
Coca-Cola (KO) EPS 50c
PNC Financial (PNC) EPS $1.66
Mattel (MAT) EPS 99c
Goldman Sachs (GS) EPS $2.28
Johnson and Johnson (JNJ) EPS $1.21
WW Grainger (GWW) EPS $2.89
After:
Cree (CREE) EPS 26c
CSX (CSX) EPS 43c
Apollo (APOL) EPS 49c
Intel (INTC) EPS 50c
State Street (STT) 96c

Retail sales rose 1.1%, better than the expected 0.7%. The Empire State mfg. index was minus 6.16, worse than the expected minus 3.0. On Tuesday we will get the CPI, Industrial production and housing market index.