Sector Investing

[ReturntoSender]

InvestmentHouse Weekend Market Summary

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

- An extended rally gets a reason to sell and boy does it sell.
- Geopolitical events overshadow decent GDP and Sentiment news.
- What evil lurks in the shadows of the world? The bond market knows (or at least it knew something was up).
- Weekend will tell more of the world picture but Friday selling likely exaggerated by the uncertainty.
- Despite the overall slaughter, many positions held up very, very well.

MARKET OVERVIEW

Fund managers show their nervousness, using the Egypt story to sell and sell some more.

A picture is worth a thousand words. Looking at the indices, you can see that a nervous market finally got a trigger to sell. The market was trending higher, but the growth indices were starting to show cracks in their armor over the last few weeks. There were reversal days on the NASDAQ and the SP600. They managed to rally back over the last week but, as noted on Thursday, these indices now had the real test in trying to take out those prior highs.

There was something wrong with the market, but we could not put our finger on it. The trends were still good. There were still great moves in solid stocks, and even those solid stocks held up quite well on Friday. There was a problem overall, however, and it was being addressed by the bonds. The bond market refused to sell off even though it had every reason to. In other words, if the economy is improving as the Fed and others are saying, then it should be selling. Instead, it has been trying to bounce.

It has moved laterally for six weeks now. It has not broken out yet, not even with the Friday selling in the stock market and the advance in the bond market. It was showing a resilience that it should not have been. There was something out there. The bond market knows what evil lurks in the shadows of the world. It may not know exactly what that evil is, but it understands that there is something going on. It would not sell off, and it started to break back to the upside on Friday as the news hit.

What was the news? It was not the fact that GDP was decent with a 3.2% advance (even though 3.7% was expected). There were some good numbers inside of that, and they were much better than the headline indicated. Final sales rose 7.1%. Consumer consumption posted the highest move in four years with a 4.4% gain. Business spending was very solid at 4.4%. The government says that inflation is low, and I guess that is the case if you are just looking at flat screen TVs and computers. Unfortunately, we do not eat those items. We have to wear cotton, and we have to eat soy beans, milk you name it. It is all going higher. That is not up for debate at this moment, however, because the government tells us it is not a problem.

The Michigan Sentiment, the final for January, was better than expected at 74.2 with 73.2 expected. It continues to rise, and it somewhat reflects the consumer confidence report that rose more than expected a week ago. They are still at low levels. They are still not at levels commensurate with a decent economy, but they do continue that upward trajectory.

The news centered around Egypt and the growing unrest in that general part of the world. The Tunisian government dissolved when the army joined the protesters. Now in Egypt, President Mubarak has called for the government to resign in response to the protests and riots in the country. He is not to resign, of course, but the government should. He wants to buy time in order to install his son and make sure he has a foundation to take over control. There is a lot of worry surrounding Egypt, mainly because Mubarak is a friend of Israel. He continued the Anwar Sadat peace with Israel. If his government is gone and extremists take over, then Israel loses a backstop in the region. That adds to the volatility.

It was interesting how the day unfolded. Futures were holding up decently despite obvious problems in Egypt that were known before the market opened. Futures were knocked back on the GDP number, but they came back. The market posted gains early on and was looking decent. Then the bid ran dry about half an hour into the trade. Stocks turned down and sold sharply into the beginning of lunch on the east coast. There were a bunch of pictures released from Egypt. It was made known that the government had shut down cellular service and the internet, and possible outcomes looked generally bad.

It is never a good idea to see a government shut down all forms of communication. We better be very careful about that here in the US. There are calls for a national ID number a general password for internet access that you use everywhere. The government is also setting up a system whereby it can shut down the internet if it finds it necessary. We should NEVER agree to curtail the avenues for asserting our right of free speech. The internet has become integral in making sure that the true stories get out. It cannot be shut down. This is a good lesson to us in the states: Do not give the government the power the shut down the internet infrastructure. But I digress though not too much. All these themes played around the world because everyone took a look at themselves and said, "That could be us."

In any event, there was a massive selloff. It checked up and was actually able to move laterally into the close. We had several hours of range trading as the market limped home for the weekend. It was an impressive thumping a good, old fashioned tail kicking. There are other, less-polite phrases, but I will stop there. NASDAQ, -2.5%; SP500, -1.8%; Dow, -1.4%; SP600 -2.5%; SOX, -2.8%; NASDAQ 100, -2.6%.

The day was epitomized by Ford ticker symbol F. It got an 'F' on the day, no doubt. The company reported earnings, and the new Explorer apparently cost a lot more than anyone expected. It gapped lower, and then it just got silly. It crescendoed lower when the Egyptian stories grew over the day, and F was pasted. It was the poster child for the selloff because it is a well-known and highly publicized stock right now. It is the only non-government automobile stock in the US, and it was taken to the cleaners. The interesting thing was it managed to bounce off a support level. We will see how that plays out.

This underscores an important aspect of how I believe the day unfolded. Yes, the market was troubled, and it was bothering us for the last several sessions. I kept talking about something being wrong and trying to reconcile what the bond market was doing versus the stock market and other indicators. I knew something was up, but could not put my finger on it. The market was showing good action, so we could not really move against it. Then when some bad news hit, it showed there were a lot of fund managers that were nervous as well. They use it to take some gains, and things got out of hand on Friday.

That does not mean the market will not sell lower, but they got out of hand on Friday because the moves were magnified by the Egyptian story. We may see a modest recovery and bounce back as we saw on F at the end of the day. Some of that Friday action could be taken out of the stocks or put back into stocks if nothing major happens over the weekend. If that is the case, we can get a bit of a relief bounce. That would, at a minimum, gives us better exit points and gives stocks a chance to move back into their patterns and above support. We will have to see how that plays out.

It was definitely a factor on Friday. Things simply got out of hand because it was the weekend and the market had rallied for eight consecutive weeks to the upside. There was general nervousness because of the rally to that point. With the news out there, and the fact that it was still unfolding as the day went on, people wanted to avoid the Valentine's Day rush. They just had a little Valentine's Day massacre of the stock market ahead of time.

OTHER MARKETS

Dollar: As you would expect on this kind of day, the dollar was sought out as somewhat of a safe haven. The greenback bounced (1.3614 Euro versus 1.3726 Thursday). Of course that move was preceded by three weeks of straight downside that broke the dollar out of a small trading range. Now it has rebounded back up to what was a support level that it broke through on Tuesday through Thursday. It may be able to move back up. This did not change the character of the dollar at all. If the problems continue to crescendo in the Middle East and related regions, the dollar might continue to bounce higher as a safe haven.
Click to view the chart

Bonds: Bonds did bounce. The US 10 year was down premarket at 3.43%, but it reversed (3.33% versus 3.39% Thursday). Looking at the charts, the bond market did not necessarily break out of its six-week lateral consolidation, but it did bounce. It does continue to move laterally, and it was showing something was up. I heard Neil Cavuto say that this was unexpected. Perhaps this event was unexpected, but the bond market was building in something, and I kept wondering what it was. The bond market's moves were incongruous with the other data we received about the economies, the stock market, and what some of the other markets were showing.

Now we understand what was bothering bond traders. The bond market is one of the best handicappers of potential problems in the world. It was showing that again over the past few weeks. I knew there was a problem but did not know what it was, unfortunately. As events unfold, we will see whether it spreads or dies down and stocks and other markets can continue to move on their merry ways higher with improving economies. This is important stuff. This is another interesting time to be alive, just as it was when the Berlin Wall came down. This does not have those positive connotations, however. It could, but we have to see how it plays out.

A lot of this has to do with food-price inflation people are hungry in Egypt. Its second major source of income is from citizens, ex-citizens, or relatives sending money back to the country that is made in other parts of the world. Since 9/11, many of the countries have clamped down on money flows around the globe. It is hurting Egypt in receiving one of its primary sources of revenue. It has been under a lot of pressure, and the people are feeling that. Of course people take it out on the government. It just so happens they are REALLY taking it out on the government. We are having a French Revolution moment in that part of country. It was amazing what happened in Tunisia. The President (dictator would be better) slapped a street vendor who was just asking what he could do to help the people. That sparked the riot, and it brought the country down when the military did not side with the government. Interesting times, indeed, but I will get back on track.
Click to view the chart

Gold: We have trouble in the world, so gold naturally bounced. It was down early. It was ready to sell and was selling hard to begin the day, but then it reversed and closed to the upside, posting a fairly decent day ($1,337.70, +17.90). After hours it was streaking higher even further. Indeed, after hours, US futures were diving further, but then they closed. There will be a lot of changes between now in the market open on Monday. Gold recovered on an international crisis, but it also did not break its recent downtrend. It fell out of its trading range and sold off, and now it is trying to come back. It tapped resistance on the intraday high and faded back to close.
Click to view the chart

Oil: With Egypt's proximity and control of the Suez Canal, oil jumped back up. Oil had been clocked for over a week. It had come back from a double top spanning late December and early January. It sold off, breaking down below that range, but it recovered it in one bound. It surged sharply ($89.34, +3.70). Up almost 5% in one day. Quite is move by oil, but it is what you would expect to happen with an issue of this magnitude in that critical part of the world.
Click to view the chart

TECHNICAL SUMMARY

INTERNALS

Volume. NASDAQ volume jumped almost 20% to 2.34B shares. NYSE volume jumped 36% to 1.34B shares.

Breadth. Breadth was a decidedly negative -5:1 on the NASDAQ. It was -4:1 on the NYSE. As you would expect, it was a tail-kicking as far as the internals.

CHARTS

SP500. There is the run from August, the November test, the second run up through this week, and then a reversal. This was a big one. This is what you call an engulfing pattern. It topped the high from Thursday, and it closed lower than the low on Thursday as well. It closed much lower. It broke near support from the 18 day EMA. That is no big deal given the five runs up the 10 and 18 day EMA. That is when it spells trouble and a deeper test. The 50 day EMA is sitting down at 1252. With a 1276 close, over the next several sessions, you could see the SP500 come back to test that just as it did in November when it had that correction. Note one little test to the 50 day EMA, a bounce, and then the second test of the 50 day EMA. Then it started the move anew.

Everyone got the you-know-what scared out of them on Friday, but look where we are. I have talked about this before, but I want to repeat it. There is a big base starting in late April of 2010, inverted head and shoulders during the summer, and a rally off of the August low. A test, and consolidation, and now the second run. Stock markets, indices, individual stocks whatever you are trading, this is not the end of the run unless there is a major game-changing event in progress.

The story in Egypt could be that, but it does not look like it at this juncture. It could expand over the weekend or next week, but not for now. Right now, we have a big base, a breakout, a test, and a second run. It is due for another correction, and the Egyptian story gave it the trigger. Now we will see the correction and test. After that, it should have another run to the upside. Wow, that sounds positive. I bet you are not hearing much of that on the financial stations.

NASDAQ. Same thing with NASDAQ. Base, breakout, November test, another run, and now a little double top coming back down. Boy, did it come back down big time. I wanted to touch on something that was very disturbing on Friday. We had downside plays on NASDAQ and on the small cap Russell. A problem occurred (seems like there were many problems on Friday) on the NASDAQ feeds early in the day, and they were erroneous. Indeed, you could not get a read for 15-20 minutes on the NASDAQ index itself. It just stood there, and a lot of NASDAQ stocks did the same. You could not get good feeds on them.

There was a problem on the NASDAQ site and with the Philadelphia exchange that means options. We were able to verify some, and we got into some plays to the downside (DECK, for instance), but you could not verify the others. We missed out on some good plays. We were looking to play the QID, but we could not get in on it. The options were messed up and NASDAQ was not showing an accurate read. By the time it was rectified, everything had gapped lower.

While the NASDAQ chart shows the actual trades being here, they were reconstructed because you could not get the feed in many places. We unfortunately missed out on really good trade, and that was quite disappointing. The NASDAQ rallied, made a light double top, and broke lower. Something of an engulfing pattern, although it did not take out the top from Thursday because the market never rallied that high to begin with. It was the same type of problem. Where will it go? The 50 day EMA is logical. There is a support level from December, and the November peak also looks logical. On the last test it came back toward the 50 day EMA to test.

SP600. We were trying to get on the small caps as well. There is a triple top here. It rolled over big time, unable to make a solid break through the trendline or the prior highs. Big reversal down. It looks like it will go below the 50 day EMA. You are shooting for this peak in late November or the peak in early November.

SOX. SOX took a hammering as well. Some double-top action here. It closed above the 18 day EMA, however, so it did show some strength. This will be one to watch. The semiconductors have been the market leaders in terms of tech and, indeed, across the market. How they perform over the next week will be important. Many of the semiconductors did just fine on Friday. Down but hardly out.

LEADERSHIP

Semiconductors. CYMI eased back, still holding above the 10 day EMA. BRKS is a recent strong stock. It was down but is also above the 10 day EMA. NVLS is the same kind of action. Most chip stocks held the day quite well.

Agriculture/chemicals. Agriculture might be interesting. It did not look great on Friday, but they were not getting nailed. Look how they game back. CF bounced back up off a test of the 50 day EMA, and AGU bounced off that level as well. These are possibilities because of food shortages, and there could be a push toward these once people figure out what was causing a lot of the problems on Friday.

Energy. You would think it would do well. CNQ is a stock that really plays off the price of oil. When oil shot higher, it bounced up off its 50 day EMA. That is something we will look at this weekend. Some of the service stocks did just fine. HAL added gains on the session. The commodities got life pumped into them, of course, because oil surged to the upside. Energy had a nice day.

Industrial. CAT was not bad. It was down on the day, but it just tapped the 10 day EMA on the low and bounced right back. CMI was not so good, struggling with another reversal day. There are some issues in some big-name industrials. JOYG is back down. It is trying to hold the 50 day EMA. It has some important tasks ahead of it and is trying to hang on.

Financial. JPM held up great. Still in its uptrend, and still working well. WFC has some cracks in the armor. It closed just below the 20 day EMA. It has been holding that on the way up. It has a roll top, but it is not necessarily definitive. EWBC had no issues.

Retail. Some retailers were having trouble. DECK formed a bear flag and turned to the downside. BBBY has been leading in retail but struggled. It sold down rather sharply, but it is still in its pattern.

Metals. Some of the precious metals stocks were able to move higher, such as PAAS. It is making a higher low and trying to bounce to the upside. Not bad action at all.

Miscellaneous. You can break stocks down into a few categories. There are stocks that have been leaders and managed to hold up just fine. Those are a lot of semiconductors and some of the financials. Then you have stocks that have been leaders and got beaten back but have managed to hold some support. BBBY is in that category. There were others that moved higher on the day. Some of the energy stocks did that, and they were able to perform quite well. The other category is stocks that were not able to hang on and got slaughtered. FDX was crushed on the day. SAPE was beaten town sharply as well. It is in business software, an area that has been performing rather well. STE moved up on the last few days but got reversed sharply.

There are three categories: Those that held up well, those that sold off sharply but managed to hold their patterns and support, and those that gave up the ghost. We were very surprised by the number of plays on the report that held up quite well, thank you very much. That is where the money has been flowing. They were not as quick to sell off, and we will see how they hold up next week. They will tell most of the tale for the market. Remember, this market has been one where money has been rotating around and not leaving. We will see next week whether money leaves the market.

THE MARKET

MARKET SENTIMENT

VIX. The VIX had one heck of a move, up 24% on the day. Nothing like a good geopolitical scare to send volatility screaming to the upside. It closed at 20, and that is still considered a low level. It is coming off a bounce of a long-term support level. If you pan back, it bounced off of this level in April of 2010. It is moving higher, but still very low historically. Does that mean it automatically has to move up? Of course not. Volatility and the market are behaving the way they should in an otherwise "healthy" stock market. As the market sold, volatility jumped higher.

Even though the market was rising, volatility was not rising before this move. It had been trailing off with this entire rally. You worry about major selloffs when volatility rises as the stock market rises. That was not the case here; it is acting normal. Big selloff in the market on geopolitical fears, hence you have a big surge in volatility. We have been buying cheap options, whether calls or puts. In terms of historical volatility, it has been very low. Even with today's surge in volatility, implied volatility and historical volatility remain very low parts of the option-pricing equation. Of course we have to see how it reacts and see if it surges back to the upside up into the 30's and 40's. If it does that, this will be a major selloff in the market. I do not see that being the case, but when you have geopolitical events in the shifting sands around the world, what seemed to be firm footing one day can be a quicksand quagmire the next.

VIX: 20.04; +3.89
VXN: 21.66; +3.83
VXO: 18.5; +3.91

Put/Call Ratio (CBOE): 1.08; +0.05

Bulls versus Bears:

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: 55.1% versus 56.0%. Continuing the modest slide, down from 57.3% the prior week and 58.8% high on this leg. Still at a high level in a string of high readings but below the 5 year high at 62.0. Fading back from the level considered bearish, i.e. where so many are in the market and believe it is going up that the ammunition to send it higher runs low. This is where you start to be careful and watch for breakdowns, but there is also a lot of liquidity being pushed into the market and that can continue the move despite excess bullishness. 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. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 19.1% versus 20.0%. With the market bounce the bears fell right back to the level hit three weeks back (19.1%). 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, above which is considered bullish 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: -68.39 points (-2.48%) to close at 2686.89
Volume: 2.349B (+18.45%)

Up Volume: 232.454M (-1.178B)
Down Volume: 2.147B (+1.588B)

A/D and Hi/Lo: Decliners led 4.97 to 1
Previous Session: Advancers led 1.06 to 1

New Highs: 106 (-53)
New Lows: 27 (+10)

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: -23.2 points (-1.79%) to close at 1276.34
NYSE Volume: 1.342B (+35.98%)

Up Volume: 168.08M (-419.804M)
Down Volume: 1.172B (+781.012M)

A/D and Hi/Lo: Decliners led 4.16 to 1
Previous Session: Advancers led 1.3 to 1

New Highs: 314 (-174)
New Lows: 49 (-1)

SP500 CHART: Click to view the chart

SP600 Chart: Click to view the chart

DJ30

Stats: -166.13 points (-1.39%) to close at 11823.7
Volume DJ30: 214M shares Friday versus 168M shares Thursday.

DJ30 CHART: Click to view the chart

MONDAY

Earnings will continue and the parade gets even louder. There will be a lot more coming out. There will also be a lot of data which ends on Friday with the jobs report. We will have Personal Income and Spending on Monday, Chicago PMI on Tuesday. The ISM index is very important. Wednesday brings the jobs report warm up with the Challenger and the ADP employment report. The weekly claims and ISM services are on Thursday, and Friday is the jobs report.

As I said, one of the keys will be whether money is leaving the market after this. It has been rotating up until Friday, and we will see if it stays in or if new money uses the selling as an opportunity to move in on what is ostensibly an improving US economy. An interesting aspect to consider is that some money may move in from emerging markets into the US stock market as a safer market (or, as one analyst put it, one of the better places in a bad neighborhood). Perhaps the problems in Tunisia and Egypt will lead to money leaving emerging markets and coming home, so to speak, to markets that are considered safer.

Again, Friday the move was exaggerated by the worries about Egypt. The pictures coming from Egypt seemed to get worse and worse, and the market sold more and more as they hit early in the day. I think it was overdone, and there may be a rebound. The question is whether there will be new money coming in to drive stocks back up and continue the rally, or if it will just be a relief bounce from an overdone day on Friday.

If stocks bounce and they are unable to get back into their pattern or over a good support level, that is an invitation to close them. We will leave other stocks that hold their patterns. If the economy is still growing and this issue starts to dissipate (if it was an overreaction), then we should see a resumption of the upside move. Again, despite the overall slaughter in the market, many positions held up quite well. It would not take much for them to continue back to the upside.

Of course, it would not take much for them to sell further either. This looks like one day of selling on the SP500. As seen in November, there were three weeks of issues. It was all over within the first week and a half, and then it moved laterally. This is just day one, and there was an almost 2% decline on the SP500. NASDAQ has already put in a bit of downside. It rallied back up to that prior peak from the week before, and it was primed to fail. Boy, did it turn over and get busted, and it has more to come back. We will have to see how far.

We were able the pick up some downside, and that was sweet. We got some good entry points despite the issues with options. Some of them we missed, and that was a bitter pill to swallow. We were all over them, but we could not get there. We will look for some more. I am seeing a lot of stocks. This is just a preliminary view, however. I may have to eat crow on that if there are not so many, but I am seeing quite a few that held up well and look like they could be very good buys. As for the downside, we may still find some here. CRM continued higher on Friday, but look at that tombstone doji action below a resistance point. That is primed for a move back down, and we will see if it makes it. There will still be some downside opportunity despite the juggernaut to the downside through lunchtime.

If there is a bounce on Monday, we could get an opportunity for downside as stocks rebound and then fail at some resistance and roll back over. A lot of this depends on what happens this weekend, and we will have to keep a close eye on the news and see how things could be opening up come Sunday. I may have to put out some alerts before then just to let people know how things look.

In any event, it is been an interesting day. The rally finally got a little comeuppance. I hate to say that, but it was due to test and the bond market was showing something was up. Sure enough, it got the trigger and the blow torches were taken out. Some stocks were burned bad, but not all of them. A lot of stocks held up. I do not want to put any false hope out there. Things could still deteriorate, and the market still does need to test.

We are probably in for two to three weeks of testing whether we like it or not. In that situation, you look for good exit points on stocks that are struggling. You keep the good ones that are able the hold up, and you look for opportunities in them. If things get better, you look for opportunities in other stocks that have spent the time quietly basing under the radar. In the interim, we will try to make some money on the downside. We were buying into positions such as FCX and DECK on Friday.

We will try to take what the market gives. Looks like we will be in a pullback now, and it is just a matter of how severe it will be. We will try to ride through it, make some money to the downside, and look for opportunity when things move back up. Remember, that was just the second run in a good base. We want to look for more upside, particularly if the economic numbers keep coming in better.

Have a great weekend!

Support and Resistance

NASDAQ: Closed at 2686.89
Resistance:
2688 is the recent January low
2725 from July 2007 interim peak
2729 is the 127% Fibonacci extension of the August 2010 run
2735 from late 2007 interim peak
2766 is the January peak
2825 is the 2007 closing peak.
2862 is the 2007 peak

Support:
The 50 day EMA at 2647
2593 is the November 2010 high
2580 is the November 2010 closing high
2569 is the November gap up point through the April 2010 peak
2550 from May and June 2008 peaks
2540 is the gap up point from early November
2535.28 is the April 2010 intraday peak
2530 is the April 2010 closing peak
2518 is interim peak from April 2010
2511 is the lower range of the November gap up point
2482 is the recent October peak
2460 is the November 2010 low.
2434 is the May interim peak and the 78% Fibonacci retracement of the April selloff.
2425 is an interim peak from May 2010
The 200 day SMA at 2401

S&P 500: Closed at 1276.34
Resistance:
1278 is the 127% Fibonacci extension of the August 2010 run
1313 from the August 2008 interim peak
1325-27 is the March 2008 closing low and the May 2006 peak
1364 is the March 2007 low
1370 is the August 2007 low

Support:
The 50 day EMA at 1252
1227 is the November 2010 peak
1220 is the April 2010 peak
1185 from late September 2008
1174 is the May 2010 high, 78% Fibonacci retracement of April peak
1173 is the November 2010 low
1170 is the prior March 2010 high
1156 is the Sept 2008 low
The 200 day SM A at 1156
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

Dow: Closed at 11,823.70
Resistance:
11,867 from the August 2009 high and peak on that bounce in the selling.
11,893, from March 2008 closing low
12,110 from the March 2007 closing low
13,058 from the May 2008 peak on that bounce in the selling

Support:
The 18 day EMA at 11,794
11,734 from 11-98 peak
The 50 day EMA at 11,574
11,452 is the November 2010 peak
11,258 is the April 2010 peak
11,205 is the April closing high
11,100 from the 7-08 low
10,963 is the July 2008 low
10,920 is the recent May high
The 200 day SMA at 10,820
10,730 is the January 2010 peak

Economic Calendar

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

January 28 - Friday
- GDP-Advance, Q4 (08:30): 3.2% actual versus 3.7% expected, 2.6% prior
- Chain Deflator-Adv., Q4 (08:30): 0.3% actual versus 1.5% expected, 2.1% prior
- Employment Cost Index, Q4 (08:30): 0.4% actual versus 0.4% expected, 0.4% prior
- Michigan Sentiment -Final, January (09:55): 74.2 actual versus 73.2 expected, 72.7 prior

January 31 - Monday
- Personal Income, December (08:30): 0.5% expected, 0.3% prior
- Personal Spending, December (08:30): 0.6% expected, 0.4% prior
- PCE Prices - Core, December (08:30): 0.1% expected, 0.1% prior
- Chicago PMI, January (09:45): 65.0 expected, 66.8 prior (revised from 68.6)

February 01 - Tuesday
- Construction Spending, December (10:00): -0.5% expected, 0.4% prior
- ISM Index, January (10:00): 58.2 expected, 58.5 prior (revised from 57.0)
- Auto Sales, February (15:00): 3.90M prior
- Truck Sales, February (15:00): 5.56M prior

February 02 - Wednesday
- MBA Mortgage Purchases, 01/28 (07:00): -12.9% prior
- Challenger Job Cuts, January (07:30): -29.0% prior
- ADP Employment Change, January (08:15): 150K expected, 297K prior
- Crude Inventories, 01/29 (10:30): 4.84M prior

February 03 - Thursday
- Productivity-Preliminary, Q4 (08:30): 2.2% expected, 2.3% prior
- Unit Labor Costs, Q4 (08:30): 0.0% expected, -0.1% prior
- Initial Claims, 01/29 (08:30): 425K expected, 454K prior
- Continuing Claims, 01/29 (08:30): 3925K expected, 3991K prior
- Factory Orders, December (10:00): -0.7% expected, 0.7% prior
- ISM Services, January (10:00): 57.0 expected, 57.1 prior

February 04 - Friday
- Nonfarm Payrolls, January (08:30): 150K expected, 103k prior
- Nonfarm Private Payrolls, January (08:30): 163K expected, 113k prior
- Unemployment Rate, January (08:30): 9.6% expected, 9.4% prior
- Average Workweek, January (08:30): 34.3 expected, 34.3 prior
- Hourly Earnings, January (08:30): 0.2% expected, 0.1% prior