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China's Rising Inflation Ignites Speculation (Weekend Newsletter)
Sunday, November 14, 2010 12:05 PM

From:
"InvestmentHouse.com" <[e-mail]>

Cisco didn't sink the market, but Cisco is no China.



1) MARKET SUMMARY
> >From "The Daily" by Jon Johnson at http://InvestmentHouse.com Cisco didn't sink the market, but Cisco is no China.

http://www.investmenthouse.com/weekendmarketsummary.htm

- Thursday's dark clouds start raining and blowing on China concerns: market seeking a reason to pull back.
- China's rising inflation ignites speculation of rate hikes and slower growth even as the rest of the world cuts rates and hopes China keeps growing.
- Expectations are now for an Irish default.
- Michigan sentiment rises, but no one cares.
- Market is in correction mode and the question is now how far.
- Still looking for new buying opportunities after the selling as fund managers still want to chase performance to year end.

http://www.investmenthouse.com/weekendmarketsummary.htm

*Cisco didn't sink the market, but Cisco is no China.

Thursday I was impressed by how the market did not collapse when bellwether CSCO was surprised by an unexpected slowdown in the last 30 days of the quarter. CSCO is very important to the business community and the public sector (i.e., the governments that buy CSCO's products), but it is not China. CSCO is big; China is bigger, particularly in the current world market where China's economy and stock market are growing. The stock markets in the US and Europe are rallying, but they are moving higher on liquidity. Massive amounts of liquidity are being injected into financial markets, driving them higher. The Fed is relying on the old adage (and not a proven one) that if people feel wealthier they spend more. They are trying to inflate financial instruments such as stocks to make people feel better about their future and thus spend more money. They think we will then somehow spend our way out of the crisis. That is about all the Fed has to work with given the atrocious fiscal policies in the United States. You have to give chairman Bernanke and his henchmen credit; creativity is definitely a hallmark of this Federal Reserve. Success is another story, however, and there is much concern as to whether the US will be successful. A lot of that concern was voiced in the G20 economic summit this week. The US was beaten about the head and shoulders by the other countries for our profligate ways and for wanting to inflate our way out of any problem facing us.

While the market weathered the CSCO storm on Thursday, it did not have as much luck on Friday due to news out of China. It reported that inflation rose at the fastest pace in 25 months. China did not say anything specific about that, but it sparked speculation that China will be forced to increase its interest rates in an attempt to slow its economy down and stave off inflation. The US and EU are trying to jumpstart their economies by printing massive amounts of money, and the PIIGS particularly Ireland and Portugal are on the verge of default. The pundits out today and markets that trade in these probabilities suggest that Ireland is more likely to default than not. Given that these other countries are trying to inflate their way out of their problems, this is a real issue. They are hoping and praying that China continues to grow while we conduct these massive liquidity experiments. Although they are not really experiments since other countries have tried to do this in the past and failed miserably. While we conduct these liquefying programs, we have to hope that China will continue to grow and drag us and the other western countries out of the quicksand that our fiscal policies have placed us in.

Not a savory position, and the US and other world stock markets sold off accordingly. It was not just stock markets. Indeed, nearly every other market in the world sold back. Stocks started lower on the session but then immediately moved to the upside. Stocks bounced immediately from the start. This also happened Thursday; stocks immediately started to the upside and continued to recover throughout the session. That was an impressive day given the negatives. It looked as if the market may be doing the same on Friday; in other words, that big fund managers would be chasing performance to the end of the year and were using another dip as an opportunity to buy. The problem is that the indices never made it back to the flatline and started to sell. They sold and sold often. An afternoon recovery helped things, but it did not take them out of the realm of ugly.

NASDAQ, -1.5%; SP500, -1.2%; Dow, -0.8%; SP600, -1.5%; SOX, +0.3%; NASDAQ 100, -1.6%. It was an ugly session, but it was not necessarily a breakdown session. The SP500 held at the 18 day EMA on the low, managing to bounce up off the intraday doldrums. The NASDAQ also recovered off its low, but it was not able to hold the 18 day EMA. At this stage of the game, they were in the pullback mode. The question is just how far we will have to pull back. Was the pullback due to China's speculation about interest rate hikes? Not likely. After all, there was some decent news on the day as well.

There were good earnings out of retail. DDS spiked higher, and NVDA did just fine on its earnings and spiked higher as well. There was also the final Michigan Sentiment report for the month. It showed a slightly higher level of consumer sentiment at 69.3 versus 69 expected and 67.7 in October. Michigan is feeling a bit better, but it did not have much of an impact on the market because the market was ready to sell. It has been one heck of a run from August through early November, and there was a gap higher over the April peaks. Right now, that looks like an exhaustion gap at this point because the indices are coming back to test. They were primed to pull back, and they started to test to the downside on the first news that was worthy of a pullback.

Markets will find the silver lining in any kind of news when they want to rally. Then when they are extended, they will find things that are wrong with any picture, whether it is good or bad news. When China sneezes in public, the market has a history of faltering. It did so in late September when China said it would have to tighten lending standards for some banks. The news came out in threes, and it was a troubling time for the market. When China came out with a problem today, it was more of a reason to pull back. It gave investors a solid reason to take a bit of profit off the table when they were already looking to do so. Some will say the market pulled back off the China news, but it just gave the market a reason to pull back. It did that with a little more vigor after the news was released and the speculation started about raising interest rates.

NASDAQ has broken back below the April peak, and it could drop down to the 50 day EMA. SP500 is still in good shape. It is at the 18 day EMA and could fade back to the lateral October consolidation and not miss a beat. Now it is a question of how far the selling will go. Given that the market is in pullback mode now, that question was on every trader's lips as of the close on Friday.

http://www.investmenthouse.com/weekendmarketsummary.htm

OTHER MARKETS

Dollar. The dollar has been on fire this week, and with good reason. There is the trouble in the EU with suggestions that Ireland and other countries would default on their debt. That is based on solid evidence of the massively wide spreads and credit default swaps for Ireland, Portugal, and Spain, versus Germany. Even the Fed promising to flood the market with liquidity was not enough to keep the dollar down from a technical bounce against the Euro (1.3693 versus 1.3658 Thursday). After a good move to the upside, the dollar is struggling at the 50 day EMA. It just cleared the twin peaks from October, but it is in good shape. It has a double bottom and it bounced through. It could slide laterally for a few days and then make a new break to the upside and challenge the August low. I do not think the dollar will be a strong world-leader currency because we are trying to devalue it. It only went up last week because it sold hard into a support level, and then the EU suddenly looked a lot crappier than everyone had imagined.

The issues in Europe caused the dollar to spike. We will see if those issues remain and the dollar can consolidate laterally and break to the upside. If it does, that could be something very disturbing with respect to Europe. The dollar is being intentionally devalued. If it still rises against the Euro even as we are purposefully flooding the market with liquidity to keep it down, that shows you how precarious things are in the EU.
Click to view the chart

Bonds. Bonds were clubbed, particularly in the US. They were closed on Thursday for Veteran's Day, and it took some of us in the office awhile to figure out why the 10 year was not moving. It was just one of those days. The 10 year bond was slammed in the US (2.78% versus 2.64%). A holiday can sometimes distort the move because it does not trade and the pressures build up. When the market does reopen, things change immediately. For example, the 10 year was trading at 2.70% premarket. Still up sharply. As the day progressed, bonds sold even more here in the United States. Of course, they are matching what is happening in Europe with the same type of fiscal policies, where the bonds are selling and exploding to new highs along with spreads.
Click to view the chart

Gold. Gold took it on the chin this week, and it really had a rough day on Friday. It was slaughtered ($1,365.50, -37.70). Gold is a bit volatile now. After a long, steady run where there was no volatility, there was a nice test and it started right back up. Fantastic. Now it is being slammed around a bit. There was some volatility at the peak, and it could not put a new high in on MACD. Is there a little momentum loss here, and things just got out of hand on Friday. That happened in many stocks and many markets around the world. Things got carried away, but I do not think it is indicative of what will happen. In other words, I do not think gold is breaking down and tumbling back down to the May or July peaks.
Click to view the chart

Oil. Oil had a rough day as well. The dollar was off slightly, but oil was down sharply ($84.88, -2.93). A good thumping right back down below the April/May peaks, and it managed to hold above these recent highs. That is a positive. As far as the technical situation, it has not broken its uptrend. It was caught in a sharp down draft on Friday, however, as commodities were roughed up because of the worries with China's inflation. They are worried that demand for products, whether it be oil or other commodities, will dissipate and they all took it on the chin. An overreaction in the near term, no doubt. We may get buying opportunities out of this, so I am not that concerned about it unless it takes a more pernicious long-term pattern. It has not shown that yet.
Click to view the chart

All of the world markets got roughed up. Again, it was probably overdone in the near term due to worries about China. That has a distorting effect on the rest of the currencies, commodities, and hard assets around the globe.

TECHNICAL SUMMARY

INTERNALS

Volume. Volume backed off considerably on NASDAQ to 2.1B shares. Why was that? Look what happened with CSCO. Volume dropped to 235M shares versus the 550M shares on Thursday. Volume backed off on CSCO, and that had the same effect on NASDAQ and the other indices as volume trailed off. Down 11.4% to 2.1B shares. On the NYSE, volume rose 6% to 1B shares. Volume was lower Thursday on the NYSE. Once again we have mixed volume, but this time flipped. It is not that bad of news because it sold off below the 18 day EMA, and it then reversed to hold that level on the close. Seeing volume pick up when it tests the near support level or a decently important support level is not a bad thing. It shows buyers stepping in. We did not get negative news as for as volume, it was just the flip of Thursday and it did not give a definitive picture. Overall, it was not a bad volume session.

Breadth. 4:1 to the downside on NASDAQ and 4.7:1 on the NYSE. We have not seen these kinds of numbers in awhile. Earlier in the year before this run started, the breadth was massive day-to-day in different directions. Depending on which way the market went, breadth was massively backing that move, so it meant very little. Buyers and sellers were fighting it out on a day-to-day basis. One day the buyers would capitulate, and the next day the sellers would capitulate. That caused wide spreads in breadth. On Friday it was just China fever. Everyone was a bit panicked and they all sold. I do not think it is anything long term at all.

CHARTS

SP500. SP500 sold below the 18 day EMA, managed to rebound to cover that area on the close. Volume moved up just above average. Yes, it is below the April peak now. Not devastating at all. The important thing is that MACD bump up on the last move, and that shows decent action. There is not a ton of momentum here, but it is not a divergent top that would show momentum is falling down and we have a likelihood of a deeper test. Right now, it is definitely heading lower from the looks of it. If it does, you are looking square at that October trading range as a support level. Indeed, it started to tap and feel toward it on Friday, and it bounced up off that level. It may not even get down to the bottom of this range at roughly 1170. It closed at 1200, so it still has plenty of room. It could dip a bit further and still be in excellent shape for its uptrend. Note that it is still above the 18 EMA. That is something it has not broken through on this entire run after it started moving higher in late August.

NASDAQ. The NASDAQ is having a little bit more of an issue. It broke below its 18 day EMA. That is the first time it has done that on this run, but it was not a complete sell off. It did bounce off its lows. It did break the trendline that is straight to the upside, but I did not expect it would hold that anyway. It is just below the April peaks but holding decently. There is not a lot of support until it gets down to 2433, where the 50 day EMA is. There are also some price points here. NASDAQ gapped up to that level in early October, and it was the interim peak from May. This is an important level for NASDAQ, and if it breaks through this 18 day EMA, it could find its way toward that level before it gets the selling out of its system and is ready to move back to the upside. Again, that is not a huge move to the downside. It causes near-term pain, but overall it is good for the market. We will stick to our stops. For the most part, as long as a stock is holding support, we do not want to sell into support. If it cannot bounce and starts to break, you want to get out and look for your next opportunity.

SP600. SP600 was down 1.5% on the session. Very normal test. It did not take out the April peak, coming back to test down toward the 18 day EMA. Still above it, and not a bad session at all. It is going to set itself up with a higher low, and a ramp to try to take out that April peak.

SOX. SOX was up. Semiconductors gave back more of the gain. They were excited because INTC announced an increase in its dividend. That always excites investors, and they start looking around for others that may be doing the same and buying those stocks. After all, there is still a lot of concern about the economy, and dividend-paying stocks are a neat thing to have. Not a bad session. Similar to the SP600, it was unable to take out the April peak. It is testing back, trying to make a higher low and give itself a ramp for a run at a new breakout over that level.

LEADERSHIP

Financial. GS looks excellent. It showed a nice, tight doji at the 10 day EMA on Friday, oblivious to what was going on in the rest of the market. Hard to complain about that. WFC was unable to hold the 200 day EMA and the pullback. Not a total collapse, but a little disappointing that it was unable to continue to the upside. EWBC was showed a nice tight doji at the 10 day EMA on Thursday but not on Friday. It broke down to the 18 day EMA and closed just below the twin June peaks. It is not dead at all. MACD is still at a higher high. That is what you want to see, but it needs to prove something to us right now.

Industrial. CAT had a nice doji at the 18 day EMA. No issues. BUCY was not bad. Lower high, but it is holding its 50 day EMA. It is not great, but it is hanging in there. No implosion on a day that it very well could have with the China news.

Metals. FCX was down a bit, but hardly hurting. AA was solid. Looking quite nice.

Retail. JWN is holding at the 10 day EMA. It was somewhat down but ignoring the other news. DDS had a big gap to the upside, very strong. Thank you for the gain. JCP did not have a great session, but it reported decent earnings. It could not hold the move upside, but it still in decent shape. SKS had a nice pullback, holding the 18 day EMA. Not in any trouble at all. M was up on the session. It bounced off the 18 day EMA on the Thursday low, and continued upside on Friday.

Technology. AAPL is showing a little trouble. High volume, selling down. It managed to bounce off the lows, but it is showing a bit of an issue. GOOG sold sharply down 2.25%. It is coming down to the gap up point. The key is whether it will hold the gap. If it does, it is likely to continue to move upside. There were big names having problems on Friday big names that have not had problems to this point, and that actually carried the water for most of the market. If they go, can the others step up in their place? I still see many good stocks doing so, but remember that the NASDAQ 100 was down 1.6% while NASDAQ was down under 1.5%. There is some trouble in those large cap tech names that are weighing it down.

Miscellaneous Leaders. AMZN broke below the 18 day EMA on the close for the first time since late August. There is a bit of an issue there. It is not dead by any means, but there are some problems with some household names that have helped the stock market move higher to this point. Now more than ever, it is up to the quality stocks that have not made the move yet to step up and help out. The leaders that have moved the market to this point are struggling.

Many stocks continue to be in good shape despite the selling. That is promising for the market. As it pulls back on this test, those will hold up and will be ready to move higher and lead out to the upside as the market recovers. That is why we keep an eye on those. Several that I am looking at could give us buys off of this test. There are many of them on the reports. DECK continues to set up, and it is in a nice flag pattern. Even though it has rallied quite a bit, we can get a nice trade out of it. We need to be thinking about that near term. Longer term, you look for the patterns that are not extended at all and can give nice moves to the upside that are sustained. We have been enjoying some of those for a long time with the likes of PCLN and NFLX. They just ignore the market action on the session and do their own thing.

http://www.investmenthouse.com/weekendmarketsummary.htm

THE MARKET

MARKET SENTIMENT

VIX. VIX had a good spike on Friday, rising 10.5%, and it came off the lows where it gapped down to the prior week. Some would say volatility was at a point where the market needed to correct. It is not really the issue right now. The correlation between volatility and market moves is not as it was, although it obviously rallied as the market sold off this past week. I am not going to get too wrapped up in volatility right now. Maybe it will set up a new correlation, but that usually happens when the market is not trending, but moving laterally. When it starts trending, that changes the whole relationship, and we have had a trending market of late.

VIX: 20.61; +1.97
VXN: 22.55; +3.18
VXO: 20.35; +2.67

Put/Call Ratio (CBOE): 1.03; +0.26

Bulls versus Bears:

The CROSSOVER from August is long gone but it did its job.

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 48.4% versus 46.7%. Still on the rise (45.6%, 45.1% versus 47.2% prior). Steady rise since hitting 29% where bears overtook bulls back in early September, but now somewhat indecisive with SP500 moving laterally. Still below the 65% level considered as bearish, above the 35% level below which is considered bullish. Where you would expect for a rally such as this one. The crossover level at 29% bulls is long gone, but it did its job. The high on the last leg was 56.0% after starting at 35.6% on the low in February, the lowest it has been since July 2009 . . . until this last leg. 35% is the threshold level suggesting bullishness. After peaking at 53 on this move the bulls lost some nerve, falling to a new low post- July 2009. Once again bulls peaked out near the 50% level. Bulls have bumped at 50ish since late August 2009, falling to 45ish and then rebounding. Hit a high of 47.7% mid-June on the run from the March lows. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 23.1% versus 24.4%. Slipping after holding steady at 24.4% for two weeks, up from 22.0% that at the time was a blip sandwiched between 24.7% the prior week). Down from 28.3% in September. The 37.7% peak at the height of the crossover is well in the rearview mirror but bears remain well below the 35% level considered bearish for the market overall. Hit 18.7% on the low in April. Hit a high of 27.8% level on the prior leg in February. For reference, cracking above the 35% threshold considered bullish. Hit a high on the prior run at 47.2%. For more reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.

NASDAQ

Stats: -37.31 points (-1.46%) to close at 2518.21
Volume: 2.143B (-11.39%)

Up Volume: 388.516M (-405.794M)
Down Volume: 1.789B (+131.193M)

A/D and Hi/Lo: Decliners led 4.01 to 1
Previous Session: Decliners led 1.92 to 1

New Highs: 54 (-53)
New Lows: 39 (+3)

NASDAQ CHART: Click to view the chart

NASDAQ 100 CHART: Click to view the chart

SOX CHART: Click to view the chart

SP500/NYSE

Stats: -14.33 points (-1.18%) to close at 1199.21
NYSE Volume: 1.012B (+6.34%)

Up Volume: 104.388M (-251.116M)
Down Volume: 901.033M (+323.024M)

A/D and Hi/Lo: Decliners led 4.68 to 1
Previous Session: Decliners led 1.89 to 1

New Highs: 155 (-85)
New Lows: 23 (-9)

SP500 CHART: Click to view the chart

SP600 Chart: Click to view the chart

DJ30

Stats: -90.52 points (-0.8%) to close at 11192.58
Volume DJ30: 218M shares Friday versus 297M shares Thursday.

DJ30 CHART: Click to view the chart

MONDAY

Monday is heavy on the economic data, of course. There will still be earnings coming out, but they will start to taper off. The week will start off with a bang with retail sales and the Empire Manufacturing Report on Monday. We will get to take a look all business inventories. Remember, they spiked up in wholesale inventories over the past two months. Tuesday comes industrial production and capacity utilization. Very important. There is the PPI, and I will be watching that. The Fed says there is no inflation, so it is something to keep an eye on. On Thursday, we have the CPI. We all know there is no inflation out there, so there is nothing to be worried about. Right?

Housing starts are very important. Of course, the weekly jobless claims come in on Thursday along with leading economic indicators and the Philly Fed. There is a lot of economic activity, so we will take another pulse reading on the US economy. I am not expecting it to be doing hand springs, but apparently there is this idea that we are improving. We will see if we get improving data. There are some serious issues, and we are not doing badly given everything that is going on. We will never break free and really roar ahead with all of the crappy fiscal policies we have, however. The monetary policy is just trying to do anything it can based upon the fiscal policies.

The market is in pullback mode. The SP500 could hold right at the 18 day EMA and bounce right back up. Very nice, orderly test by the large caps. The question is whether NASDAQ is going to be able to hold the line or if it will tumble down toward the May interim peak that is coincident with the 50 day EMA. It is rising up below prices. There are some big names in the index and they are not all tech names that are sagging notably. They are very heavy after strong runs, and they could break lower. If they do, they will take NASDAQ down with them because it is a market-cap weighted index. The big market cap stocks cause the majority of each move. We have to watch that, and it could definitely slide back further.

There is nothing nefarious at this point. Consider the bigger picture of what is going on. The year-end run with the large mutual funds and other fund managers chasing gains and the massive amounts of liquidity the Fed has pumped into the market. The idea is that it will continue to the upside before the year is over. The question is when and how far this pullback will be. NASDAQ could hold anywhere in the range from where it closed on Friday, as it is in the top of this April peak consolidation, or it could all fade all the way down to the 50 day EMA. That would be a little painful. It closed at 2518, and the 50 day EMA is down at 2433. That is almost 90 points to the downside. While that would be a normal correction that would set up new buys, it is painful in the near term. I expect more of a pullback. I am not sure how much we will get, but I expect more. We have reasonable stops. As long as our stocks are holding key support levels, we will let them run. We do not want to sell into support, particularly with the idea that the market is just testing back and will bounce again. By the same token, if things get a little out of hand, we do not want to let good positions that we have made a lot of money on steal some of that money we will use for the holiday season.

We will mind our stops and be reasonable about them, watching where support is. Do not sell into support, but then do not let good gains get out of hand to the downside. I still think we will get good pullbacks out of this. This weekend I will be looking at stocks that are already in position to move. They may not do it if the market will pull back for another few days or a week. They will have to retrench and come back a little more, but in all likelihood, that only gives us better setups to play out of. As they bounce, we get the trigger and we can make the moves. We may also see money rotate out of some areas that have performed very well. AAPL and GOOG could start losing their backing at this point and need to consolidate. The money rotates out and looks to new areas and starting sending them higher. We will get those kinds of buys. That is what a healthy market does. Keep your eyes open and see where the money is flowing, and then you move in those directions. Healthcare has been getting money of late, and we have picked up a few of those positions.

We will keep our eyes open, we will look for any sector rotation that is ongoing, and we are ready to put our money to work when given the opportunity. I anticipate some more pullback here. That is why we were taking gain on the way up. We banked a tremendous amount of profits on the way up during this rally, so when we do get a pullback we are not just panicking and wantonly selling. We can sell with a cool, calm head. If we see a stock that we have a big gain built up in and it is holding support, why would we want to dump it? There is no reason to do that at all.

There is a lot of data moving into next week. We are in the midst of a pullback, and some people are already starting to get worried about it. That is good. I like to see the concern ramp up. As everyone gets bent out of shape, it has the tendency to end quicker. We will be looking for opportunity in new stocks, and we will be protecting our positions. As long as they hold support, I am sanguine about the outlook ahead. Not too sanguine, however. As soon as you get that way, you will get one in your ear. We will be ready and we will watch. We will not get one in the ear, and we will make some more money before the end of the year is over. I am excited about this pullback because we will get more opportunity to get great stocks as they recover. Have an excellent weekend.

http://www.investmenthouse.com/weekendmarketsummary.htm

Support and Resistance

NASDAQ: Closed at 2518.21
Resistance:
The 18 day EMA at 2521
2530 is the April 2010 closing peak
2535.28 is the April 2010 intraday peak
2540 is the gap up point from early November
2550 from May and June 2008 peaks
2569 is the November gap up point through the April 2010 peak
2725 from July 2007 interim peak
2735 from late 2007 interim peak
2862 is the 2007 peak

Support:
2518 is interim peak from April 2010
2511 is the lower range of the November gap up point
2482 is the recent October peak
2434 is the May interim peak and the 78% Fibonacci retracement of the April selloff.
The 50 day EMA at 2433
2425 is an interim peak from May 2010
2382-2395 from 2008
2324-2370 is a range of resistance from early 2008
2341 is the June 2010 peak
2320 to 2326.28 is the January 2010 high
2319 from the September 2008 peak
The 200 day SMA at 2317
2310 is the August 2010 peak

S&P 500: Closed at 1199.21
Resistance:
1220 is the April 2010, post-bear market peak is breaking
1313 from the August 2008 interim peak

Support:
The 18 day EMA at 1198
1185 from late September 2008
1174 is the May 2010 high, 78% Fibonacci retracement of April peak
1170 is the prior March 2010 high
The 50 day EMA at 1167
1156 is the Sept 2008 low
1151 is the January 2010 peak
1133 from a September 2008 intraday low
Bottom of the January 2010 consolidation 1131 to 1136
1129 to 1131 is the June and August 2010 peaks
The 200 day SMA at 1127
1119 is the early December intraday high
1114 is the November 2009 peak
1106 is the September 2008 low
1101 is the October 2009 high and the recent May and June 2010 interim peaks
1084 to 1080 (September 2009 peak)
1078 is the October range low
1070 is the late September 2009 peak as well as several other peaks and valleys even in 2010. Important level.
1065 is the May flash crash intraday low.
1044 is the October 2008 intraday high AND the February 2010 low
1039 to 1040 are the May, June, and August 2010 lows

Dow: Closed at 11,192.53
Resistance:
11,205 is the April closing high
The 18 day EMA at 11,221
11258 is the April 2010 peak
11,734 from 11-98 peak

Support:
11,100 from the 7-08 low
The 50 day EMA at 10,978
10,963 is the July 2008 low
10,920 is the recent May high
10,730 is the January 2010 peak
10,609 from the Mid-September 2008 interim low
10,594 is the June 2010 peak
The 200 day SMA at 10,576
10,496 is the November 2009 high
10,365 is the late September 2008 low
10,285 is the late December consolidation peak
10,260 from the May and June 2010 interim peaks are breaking
10,209 is recent August 2010 low
10,120 is the October 2009 peak
9938 is the August 2010 low
9918 is the September 2008 peak
9855 is the early September peak in its lateral range
9835 is the late September 2009 peak AND the February 2010 low
9829 is the September 2008 closing high
9774 is the May 2010 intraday low

Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

November 12 - Friday
- Michigan Sentiment, November (09:55): 69.3 actual versus 69.0 expected, 67.7 prior

November 15 - Monday
- Retail Sales, October (08:30): 0.7% expected, 0.6% prior
- Retail Sales ex-auto, October (08:30): 0.4% expected, 0.4% prior
- Empire Manufacturing, November (08:30): 11.7 expected, 15.73 prior
- Business Inventories, September (10:00): 0.9% expected, 0.6% prior

November 16 - Tuesday
- PPI, October (08:30): 0.8% expected, 0.4% prior
- Core PPI, October (08:30): 0.1% expected, 0.1% prior
- Net Long-Term TIC Fl, August (09:00): $38.9B prior
- Industrial Production, October (09:15): 0.3% expected, -0.2% prior
- Capacity Utilization, October (09:15): 74.9% expected, 74.7% prior
- NAHB Market Housing, November (10:00): 15.0 expected, 16.0 prior

November 17 - Wednesday
- MBA Mortgage Application, 11/12 (07:00): +5.8% prior
- CPI, October (08:30): 0.3% expected, 0.1% prior
- Core CPI, October (08:30): 0.1% expected, 0.0% prior
- Housing Starts, October (08:30): 600K expected, 610K prior
- Building Permits, October (08:30): 565K expected, 539K prior
- Crude Inventories, 11/13 (10:30): -3.27M prior

November 18 - Thursday
- Initial Claims, 11/13 (08:30): 442K expected, 435K prior
- Continuing Claims, 11/06 (08:30): 4300K expected, 4301K prior
- Leading Indicators, October (10:00): 0.6% expected, 0.3% prior
- Philadelphia Fed, November (10:00): 4.5 expected, 1.0 prior

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