Wednesday left the day full if zigzags and a narrow range again, not quite as narrow as Tuesday but close. The day closed red across the broader markets for a modest loss and volume came in slightly higher on the NYSE and Nasdaq for distribution days. Futures came in mixed on the day for volume with the ES and TF lighter than Tuesday leaving only the NQ higher. The TRIN closed at ..68, bullish on the day and the VIX at 21.63. Gold closed up $1.90 to $1141.30 and oil up 38 cents to $79.52 a barrel.
Wednesday's narrow range candlestick left a hanging man, this following a harami is giving us a three step reversal. The hanging man shows the session spent more time on the lows and then was bought, which if fails can trap longs and provide a weakening top. Long will be forced to sell and send the market down if that did occur. We will need a weak close to confirm this setup into Thursday's session and then see the drop come in. With the window under us still from the gap, that definitely is allowing for a toppy look with the last three days candles, but again there is no confirmation for anything yet. Failure to confirm would let those late day longs prosper and fuel a break out with even more buyers piling in.
Into Thursday we start the day with early data and because we've seen a fair amount of disappointing data we'll see if the market continues to sit on the fence with that. Monday kicked the week off with a trend day (up), Tuesday an inside narrow range day (also up), Wednesday a zigzag day (down), leaves us to look for a reversal day, which really Wednesday wasn't real far off, it just took a long road around to zigzag a lot. Leaving that as a fine line there but still points us to another day like Wednesday or reversal day with an expanded range. I don't think the range will stay as narrow as the past two days and that lets us see if the confirmation will come for a drop or will the market break to the upside. Continue to keep these resistance levels handy on each index Nas Composite 2251.84, Nas 100 1887.98 (needs to say over 1781.28 to hold here), S&P 500 1121.44-1158.76, Dow 10495.20, and Russell 2000 625.31 and onto 660.38.
The futures especially the ES rotated around the pivot all day, that will not continue if our range expands Thursday. We still have not seen the weekly pivots and that is going to require a drop, so that reversal pattern confirming would get that done. Keep looking for those levels if the market is unable to take out Monday's highs. We can sit in range all week...boring! BUT indicators are turning down off today's action and any weakness will start some sliding action for us from here.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 Unemployment Claims, 10:00 Philly Fed Manufacturing Index, 10:30 Natural Gas Storage. Friday nothing due out.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market PLCE, CIT, DKS, GME, ROST, SHLD, STP, and after the bell DELL, GPS, INTU, OHB, ZUMZ. Friday pre market ANN, DHI, SLM, KIRK and nothing after the bell.
COMPX (Nasdaq Composite) closed -10.64 at 2193.14. Support: 2175.57, 2168.03, 2136.17, 2093.45. Resistance: 2236.47, 2267.66, 2294.18-2300.81.