Friday closed the day green across the broader markets on higher volume for an accumulation day. The day did not close on the highs, but help in the top half of the days range. The weeks range narrowed on the Nasdaq, but was slightly larger on the SPX and Dow over the prior week. Overall it was still a smaller range than the big two week move in July. August tends to contract and digest to get things to September. The TRIN closed at .88 which is barely bullish and the VIX at 24.76. Gold fell $3.10 to $959.80 and oil was also down $1.06 $70.88 a barrel.
The weekly Nas 100 and Nas Composite sit just under last weeks highs, but did close marginally higher. The CCI fell slightly off for a small amount of divergence, RSI is 66, MACD is still open to the upside and the ma's are in bullish order, the upper Bollinger is still overhead. The S&P 500 and the Dow retraced into 38.2% off the October 2007 down to the March 2009 lows (1014 and 9422), this is also the inverted head and shoulders neckline. The Dow and SPX is right into the upper BB on the weekly, CCI showing slight divergence, RSI is at 62 and MACD is open to the upside. While the Nasdaq did not take out the prior weeks highs the Dow and SPX did, thanks to the financials big advance on the week. With the Dow and SPX at such key resistance and the Nasdaq lagging this week will have to jump over the line or back the bus up for a look lower.
Daily charts have the SOX and hardware sectors lagged behind the financials and even starting to see sell signals on the SOX. Hardware is more range bound and not as overbought as the banks. Brokers aren't quite as overbought, however any big move up will take care of that. On the daily Dow and SPX the upper Bollinger is trying to curl over, that would be one sign of exhaustion, but we have awhile before that produces much, CCI is still over 100 line, RSI at 73-74 and Stochastics crossed down and the MACD is flat. The NAs 100 and Composite have stochastics turned down, MACD is flat, RSI at 67 and CCI is at 76-80. The Nasdaq also sits on the 10dma and the SPX and Dow are still over that support.
The week ahead will be busy with economic data and the highlight will be the FOMC meeting. After the slow drip off the highs Friday we can look for that to have some follow through into Monday. The slow pace is likely to continue as well into this week. Things should pick up mid week, but Monday and Tuesday maybe very narrow range and quiet. Every dip has been bought and we should expect that to continue until it fails. A pullback of any substance is going to be hard to find, because the sideways action helps to keep the market from becoming overbought and helps to digest any move. The tone is still bullish, the trend is still bullish, it is just becoming more digestive and stagnant. Which can start sectors rotating and eventually pull the market in.
Economic data for the week (underlined means more likely to be a mkt mover): Monday nothing due out, Tuesday 8:30 Nonfarm Productivity, 8:30 Prelim Unit Labor Costs, 10:00 TIPP Economic Optimism, 10:00 Wholesale Inventories. Wednesday 8:30 Trade Balance, 10:30 Crude Oil Inventories, Tentative Fed Credit and Liquidity Report, 2:00 Federal Budget Balance, 2:15 FOMC Statement & Funds Rate. Thursday 8:30 Core Retail Sales, 8:30 Retail Sales, 8:30 Unemployment Claims, 8:30 Import Prices, 10:00 Business Inventories, 10:30 Natural Gas. Friday 8:30 Core CPI, 8:30 CPI, 9:15 Capacity Utilization Rate, 9:15 Industrial Production, 9:55 Prelim Univ of Mich Consumer Sentiment, 9:55 Prelim Univ of Mich Inflation Expectations.
Some earnings for the week (keep in mind companies can change last minute: Monday pre market CIT, DYN, PCLN, VM and after the bell CEP, ETP, FLR, QSFT, ZOLT. Tuesday pre market DNDN and after the bell AMAT, PAAS, CLWR. Wednesday pre market LIZ, M, SLE and after the bell NTES, SINA, TIE. Thursday pre market APWR, DPS, KSS, URBN, WMT, and after the bell A, ADSK, BBI, CHINA, DV, JWN, RRGB, SUMT, TSCM. Friday pre market ANF, JCP and nothing after the bell.
SPX (S&P 500) closed +13.40 at 1010.48. Support: 1008.26, 997.94, 961.20 38.2%. Resistance: 1014.14 big 38.2% level, 1019.21, 1048.19, 1096.82, 1121.44.