Wednesday closed the day red on higher volume for a distribution day on the NYSE and Nasdaq. We erased Tuesdays accumulation day with an exhaustive move off the Fed. Volume on futures came in higher than Tuesday's to leave a distribution day there too. The TRIN closed at 2.30, bearish and the first that high since September 1st which was over 3. The VIX again hitting new intraday lows for the year at 22.19 and closed up 41 cents at 23.49. Gold closed down 1.10 at $1014.40 and oil down $2.77 ending the day at $68.99 a barrel.
The Fed kept rates at historically low levels and made some changes to the statement. However, over all the statement echoed what Fed Chairman Bernanke stated last week. Basically things are improving but slowly and we aren't out of the woods yet. The buyback of debt was extended to March 2010 to let the economy continue to improve and see how things go. I don't see anything in the statement to blame the fed for today's drop. The market hit overbought conditions and key resistance and pulled back is my take on the move. The exhaustive move is good for the market and will allow the upside to get a rest now.
One distribution day doesn't really spoil the bulls run. The market is still trending up and a correction or a good rest is necessary to continue any movement. The day also left a shooting star, which if confirmed with a lower close on Thursday a deeper pullback should come into play. Intraday the market tapped new highs on the year, so don't expect a smooth move early on. Some jitters about..should investors pile in on a single down day, should investors take some profits and more scenarios than we could list here come into play. Expect some jittery action and be patient on the pullback.
The TRIN closed over 2 to let the market setup for an early bounce. We haven't seen a lot of downside for weeks so these bars were heavy and kept accelerating as we dropped through support levels. On the morning bounce for the TRIN watch the ES test 1063, any further 1068 and that would be more than a TRIN bounce, it will be the dip buyers rushing back in. On the NQ 1733.25 is a key retracement any further up to 1740.75 would be more than a bounce. TF watch 616.10 retracement then 619.20 retracement. On the downside 1052.50 support drops we can look for 1039.50 to get a good look. NQ watch 1722 support and then to 1702.75 for a key level. TF 609.30 and then 600.20 levels. So we look for a bounce, then a retest of Wednesday's low and the levels above for any further drop.
Economic data for the week (underlined means more likely to be a mkt mover): Thursday 8:30 Unemployment Claims, 10:00 Existing Home Sales, 10:30 Natural Gas Storage, Day 1 G20 meeting. Friday 8:30 Core Durable Goods Orders, 8:30 Durable Goods Orders, 9:55 Revised Univ Of Michigan, 9:55 Univ Of Mich Consumer Sentiment, 10:00 New Home Sales, Day 2 G20 meeting.
Some earnings for the week (keep in mind companies can change last minute: Thursday pre market AM, RAD, SCS, TXI and after the bell COMS, FINL, RIMM. Friday pre market KBH and nothing after the bell.
NQ (Nas 100 e-mini) Thursday's pivot 1733, weekly pivot 1705.50. Support: 1722, 1717.50, 1712.25-1711.75, 1705.25, 1702.75, 1695.50-1694.25 fills gap. Resistance: 1733.25, 1737, 1741, 1746.50, 1753.25-1754.25, 1758.50