Wednesday delivered a big drop across the broader markets on heavy volume for a distribution day. The COMPX, NDX and SPX all dropped the 50dma and closed on the lows. The Dow is still 65 points over the 50dma. The A/D and U/D lines closed on the lows, the TRIN closed at .97. Which is neutral and because the TRIN measures underlying supply and demand in the market we have to pay attention to that. That can mean the selling volume is higher, but the declining shares are being bought or that the selling volume in the dropping shares is declining as the day progresses to take off the pressure. The VIX closed at 27.93 back in the October 5th range just off the October high at 29.56. Gold closed down $4.70 at $1030.70 and oil down $2.25 at $77.44 a barrel.
Data was a little disappointing today and Thursday brings even bigger pieces of information in the ever changing economy. Again Thursday we will see data set the days tone and the break of those 50dma's will be watched for confirmation or a snap back. Unless Thursday closes another day lower that break is not confirmed. Key sectors: Banks, Brokers and Semi's all dropped the October lows today. The SOX and Banks (BKX) breaking that swing low confirms a double top, leaving us to look for confirmation into Thursday. A lower close, like the indexes 50dma would leave us looking for a bigger drop.
Thursday the market could use some retracement after four consecutive down days. The 65 minute index charts and daily are short term oversold. That should bring in a bounce in that first hour. At that time we'll bracket that range and look for a break of it on either side for the days direction. A digestive day would not hurt the market to rest and digest this move down. Key levels to watch for will be the 50dma's, if we move back over them the bounce should take hold. Below us the SPX at 1012.72, the Dow 9697.38 50dma and 9430.08 10/2 swing low, COMPX 2013.55 and the NDX 1633.39.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 Advance GDP, 8:30 Unemployment Claims, 8:30 Advance GDP Price, 10:30 Natural Gas Storage, Friday 8:30 Core PCE Price Index, 8:30 Employment Cost Index, 8:30 Personal Spending, 8:30 Personal Income, 9:45 Chicago PMI, 9:55 Revised UoM Consumer Sentiment, 9:55 Revised UoM Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market AGN, AEP, BCRX, CME, COCO, XOM, K, MGM, MOT, MYL, NEM, ODP, ZEUS, PDE, PG, S, TSM, ZLC and after the bell ADPT, ACS, ATML, DLLR, ERES, KLAC, MXIM, MFE, MET, MSTR, RNWK, SPF, TSRA, USTR, VAR, VSEA, WYNN. Friday pre market CVX, CVH, D, DUK, NYX, SNE, UPL, WY, YRCW and after the bell SHPGY.
COMPX (Nasdaq Composite) closed -56.48 at 2059.61. Support: 2040.73 Oct. lows, 2013.55 38.2%, 1958.84. Resistance: 2083.84, 2089.03 50dma, 2100.17, 2108.30, 2124.02, 2139.74.
SPX (S&P 500) closed -20.78 at 1042.63. Support: 1037.37, 1019.95 Oct lows, 1012.72, 98.34. Resistance: 1050.28 50dma-1053.76, 1064.79, 1078.76, 1088.70, 1092.64, 1101.36 2009 highs.