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InvestmentHouse Weekend Market Summary 7/29/11

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

- Predictions of more carnage as a result of debt woes fail to materialize.
- Terrible GDP data turns the market lower, but again, no freefall.
- Dollar, bonds, gold and oil react as expected to very bad economic data.
- Chicago PMI hangs on to expansion.
- Michigan sentiment flat and still quite subpar.
- Okay, why is the market holding in the range? Anticipated liquidity gratis the Fed.
- President calls our system not worthy of an AAA rating. Oh really? Versus what?
- SP500, SP600 tap the 200 day SMA and rebound. No reversal, but important action.
- Moody's now saying no immediate downgrade coming.
- Maybe some short covering brought the indices back, but the stock market is poised for a 'deal' this week, and a little bit of help from the Fed.

MARKET SUMMARY

No deal, no predicted carnage, and indeed some decent action inside the trading ranges.

Given the unending angst (and in many cases drivel) on the financial stations with respect to the budget debate and its impact on equity, debt, and other markets, I am providing you parts of some of the alerts we sent Friday discussing the issues confronting the markets. Those of you who already saw these bear with me. A bit off the beaten path, but given all of the hyperbole by many market analysts I felt it important to give some real time analysis of the issues unfolding and hopefully some perspective in a sea of nonsense.

>From the Pre-Market alert:

Some on the financial stations are talking as if today is going to be the end of the world. This is no LEH moment, it is fear of the unknown with respect to a downgrade. The markets are trading lower in a trading range as we all know, and this action is going to push them lower in that range. No major collapses thus far. It may lead to that ultimately but spending will be reigned in and a deal will be reached at some point because there is no choice. As the plans stand, a downgrade is inevitable. The talking heads are pushing for a deal to pass that won't avoid a downgrade. That action in itself is absurd. If no deal is reached, one will be done for us because of no funding, and that self-correction will avert Armageddon. As stated before, not getting another credit card while paying our creditors is a signal of fiscal responsibility we have not had for 30 years. Not being Polly Anna here, but just looking at the markets and reality. Bumps of course because of the unknown, and ultimately we stand to lose our status as the default world currency, but we stand to lose that regardless without taking serious action.

>From the Mid-Morning alert:

President appeared with a statement about the negotiations. He made the comment that the US has a Triple A rating it wants to keep but that we "don't have a Triple A political system." As opposed to what? A dictator simply making the decision for us? This is a republic at work with representatives doing what their constituents elected them to do. Politics. Ugh.

>From the Market Close alert:

Angst in the morning followed by a recovery to positive just could not hold into the close. The indices finished lower, but unlike the predictions of the sack cloth and ashes group on the morning financial stations, there was no carnage. SP500, SP600 tapped their 200 day MA on the lows and bounced. DJ30 struggled more, unable to bounce as significantly, but it is well above its 200 day. SOX is attempting to reverse, again, off the June lows.

We banked some downside gain on the early blow down when we saw it was not going to be a record-breaker and indeed when SP500 held the 200 day MA. We also scored some big gain on ZOLL as it shocked the market with its results (get it?). Picked up some ISRG as it surged (get it?) on the ZOLL results. Had to bag some stocks that could not hold support or could not recover from some downside pressure.

Now the weekend comes. GDP was terrible and next week is the jobs report. Oh yes, and the budget 'deal or no deal.' The name calling is high. It drives one crazy to hear congressmen and congresswomen who drove up the debt to incredible levels, spending like kids in a candy store with found money, calling those demanding fiscal responsibility as part of any debt ceiling increase 'children.' I suppose the proper response given the level of the debate would be 'takes one to know one.'

The market may have been covering some shorts ahead of the weekend but the market acted technically as it should inside its trading range. This despite the predicted carnage. If there is no deal Monday perhaps, perhaps, the market sells more, but it has left itself plenty of room in its range to react. It wasn't a great day for us but it was cool taking profits when everyone was measuring coffins.

****

Please read over them to see what you think. It gives a flavor of "as its happening," but hopefully with some fairly sage comments. One of things pointed out in the morning was that this is really no Lehman Brothers moment. It was not a shock to the market. This is more about fear of the unknown over what may happen if the U.S. does not raise its debt ceiling and chances a ratings downgrade. We already know there will not be a default; the President and the administration have been telling our creditors that we will not default. What has people scared is the question of what services will be cut off, what has to be closed, and how that will impact a potential credit downgrade. When people do not know, they react negatively. The interesting thing is the market is not acting as if it is ready to implode.

There was terrible economic data on Friday morning. GDP came in at 1.3% in Q2. That was a bit better than some of the Armageddon views. The real gut punch was the 0.4% in Q1 revised down from 1.9%. That shocked the market, but it did not obliterate it. Futures were lower ahead of the news, but they really fell when news of the GDP came out. Even so, you can see a test lower and a recovery by the SP futures. What happened overall is the SP500 tapped the 200 day EMA on the low and reversed. This is one of the key support levels I cited in the report where we should look for any kind of buyer response. Indeed there was.

Perhaps this was just some short covering going into the weekend where there will be a game of "Deal or No Deal" With respect to the debt crisis. We were involved in some short covering as well. When I saw the SP500 hit the 200 day EMA and start to bounce, I took some downside gain and banked it. When you consider what is happening in the world and what the markets are doing, the market is acting technically. It is trading nicely inside of its well-established trading range. Despite the predicted carnage, the market is acting as a market should on a technical basis. The market is not anticipating any kind of meltdown. Later I will talk about the reason the market is holding up so well.

If there is no deal come Monday, perhaps the market sells some more. It has left itself plenty of room in its trading range to come down and bounce off of another support level. As I noted in the last alert, it was not a great day for the market. It was not necessarily a great day for us. It was not really a great week, but we banked nice gain as the market was labeled to be in carnage. That is cool. We were able to bank nice gain all week. Of course we had to suffer some losses as things sold off and stocks suffered through some earnings, but consider how terrible this week was. You may have listened to some of the analysts, and they were truly panicked. It was amazing. Some of the pundits who panicked tend to pride themselves on not panicking and being pillars of sage advice on market moves. They capitulated and the market did not. Isn't that the way it always is?

Looking at the intraday action, there was that initial selloff, but as the SP500 hit the 200 day EMA, it reversed. It recovered and rallied to the upside. Indeed NASDAQ was in the lead, and it pulled the other indices positive. Unfortunately, that was not meant to be on the day. They slid down in the afternoon and managed a late bounce. It just kept them out of positive, but they held a lot of their gain off the lows. As noted, there is plenty of room in the trading range for them still to sell a bit more and just have a normal move to test the bottom of the range.

NASDAQ, - 0.36%; SP500, - 0.65%; Dow, - 0.8%; SP600, - 0.4%; SOX, - 0.9%.

OTHER MARKETS

The other markets responded exactly the way you would expect to the very weak economic data. There is also that other issue I will mention shortly. You already know what it is.

Dollar: 1.4365 versus 1.4308. The dollar closed slightly lower versus the Euro. It was slightly higher against other currencies because a lot of the world is rattled by what is going on. We had terrible GDP results, but people still did not want to dump dollars for fear of what will happen to GDP results overseas.
Click to view the chart

Bonds: 2.79% versus 2.96% 10 year U.S. Treasury. Bonds exploded to the upside, closing at a new rally high and breaking out of this two-month range. Lots of fear pushing people into U.S. treasuries even when we are talking about defaulting. Amazing. Shows you the state of affairs in the world overall. Of course, bad economic data means the Fed is right there waiting for the moment it can announce QE3. The Fed is in a terrible position. It does not want to have anymore stimulus, and it is afraid of the inflation that is picking up. It has to do something because the economy is going into a second recession.

The Fed will feel it has to do something. The something it will do as soon as there is some kind of debt deal will be to announce some other kind of stimulus. Of course, just as in a period of mourning, it has to give a proper amount of time before it acts. With the GDP numbers as horrid as they were, with durables as terrible as they were, and with sentiment in the toilet, the Fed has to do something. That is one reason bonds are surging. That is another reason stocks are holding their ranges. The market is anticipating QE3. The economic data has been tailing off for seven months now. We have been calling it all the way. I kept talking about a QE3 coming, and I would bet a lot that the Fed will announce a QE3. That is what the market is anticipating. That is why the stock market is holding inside its trading range despite all of the bad news. There it is. I said it, and you knew that because I have talked about it before.
Click to view the chart

Gold: $1,629.70, +13.50. Naturally gold enjoyed a nice session. Another new high. Gold is on a tear, and it has every reason to be. Stocks are anticipating QE3, and gold is anticipating QE3. That means a lower dollar, and that means more inflation fears in the future. That means gold valued higher and higher.
Click to view the chart

Oil: $95.70, -1.74. Oil struggled again. Oil tapped the 200 day EMA on the low and managed to recover. It is still not giving up the ghost. It sold off this week, but it is making a normal test. It is holding where you would think it would hold, and it is trying to hold up above that range from December and January and even February. It may try to bounce from here, but it looks like it wants to come back and test those lows again. We will see. We really need oil to fall because we have a bad situation right now. Gasoline prices have moved well up off their lows of the past couple of months. I think the national average is back in the $3.60 range. Way too high. That is killing the consumer as you will see in the GDP numbers.
Click to view the chart

TECHNICAL SUMMARY

INTERNALS.

Volume. Volume jumped higher by 10% on NASDAQ to 2.2B shares. It jumped up 15% on the NYSE to 1.07B shares. Both back above average on a selloff. A selloff, yes, but a reversal off of a support level. You had some selling volume, no doubt. Technically a distribution day because the indices finished lower. Did not reverse anything necessarily, but also you had some buying volume coming in and pushing stocks up. They did not roll completely over and sell off back to the lows. There were still buyers hanging on maybe not as dominating as they were before, but still there at the close.

Breadth. Breadth did not tell any kind of story at all. -1.3:1 on the NASDAQ and -2:1 roughly on the NYSE. Nothing near what we have seen of late when there has been any kind of carnage in the market.

CHARTS

SP500. SP500 tapped the 200 day EMA and reversed off of that level. Significant chop of its lows. It did not manage to close positive which was a bit of a disappointment. What can we take away from this? This is still excellent range trading. It is still well within its range, and it bounced off of a support level at the 200 day EMA. That is a start. That was one of the areas I thought would be an important point, where the buyers might try to come back in. Maybe on Friday it was more that the sellers were covering up some short positions ahead of the weekend. Either way, it is good action inside of the range.

SP500 could still come down to these June and March lows. Nothing to stop it there. It could trade back to the levels in the range. What would stop it given the terrible economic data? You know what I am thinking: QE3 and the thought that the Fed will step in. Everyone the focusing on whether there is a deal or not with the debt. I do not think that is the real key. Maybe I am wrong. It would not be the first time. I am not a political guy; I am more of a market and economics guy. If we do not have a debt deal, there could be selling that takes the indices down to test these lows. But something tells me the market realizes that the failure of a deal is not a default. Moody's came out after hours on Friday saying there would not be any imminent downgrade of the U.S. That lightens up some of the pressure on this even more.

NASDAQ. NASDAQ shows similar action. It gapped lower as well. It did not tap the 200 day EMA, but it held well above that level, reversed, and just missed closing positive. It traded positive much of the afternoon session. It did not hold any necessarily clear-cut support, although you can see several gaps in this range and other areas that it has held before. It was not tremendous support there was just minor support at this level. Would not call this a great reversal, and it is not the picture of health. It still looks like it wants to come down from here. As with SP500, it has plenty of room in this trading range to give up some ground and still hold the range and bounce once more. It is in the upper half of its range even on the low from Friday.

Techs have been beaten up roughly during the week, but overall the NASDAQ is holding up quite well. Of course it is getting help from some healthcare and retail stocks making great moves.

SP600. SP600 was virtually flat on the day. As with SP500, they tapped the 200 day EMA on the low and reversed. SP600 has been very roughed up this week. It came down close to the March and June lows. It reversed on the 200 day EMA, and now we see if that is enough to bounce these puppies to the upside. The small caps are suffering with weak economic data, but they still managed to recover even with this terrible GDP and the terrible consumption data.

Short covering? Probably. Probably some buying, too. Is it out of the woods? No. Is it holding in its range? Yes. Does that have a chance of keeping the move going? Yes, as long as there is going to be another round of Quantitative Easing.

SOX. The SOX closed lower by almost 1%. It was roughed up as well. Once again, it undercut the June low, but it has also rebounded once again, closing at that June intraday low. No, this is not a reversal. It is not a guarantee that SOX will move higher here. It showed some gumption coming off of the lows, but it still has a lot to approve. It has a small trading range that is holding at a larger trading range bottom. We will see if it can make the move and make it stick. It rallied above this level on Friday, but it could not hold the move.

LEADERSHIP

Financial. Financials are not providing a lot. They are still fading back after their trend breaks the prior week. Good earnings broke the trend. They are testing and testing and testing. Cannot seem to stop the bleeding, but maybe they will find support in this range such as on JPM on Friday. Looks like it is trying to hold the lower stretch of that range.

WFC tested as well. It fell back through its 50 day EMA. It has not totally given up its move yet. We will see if it can hold. It still has the trend break going. We will see if it can bounce from here. They are not providing SP500 with any kind of support right now.

Retail. Some of the retail stocks are holding up extraordinarily well. AMZN had great numbers on the week. PCLN is also doing quite well, breaking higher on Friday. Some big names are performing, but a lot of names are struggling. We have to be very concerned overall with retail given the very poor consumption numbers in GDP. They are terrible at 0.1% versus 2.1% in Q1.

Technology. Some of the big guys are holding up well. AAPL was down but not by much. I would like to see it fill this gap and then continue the move. It would give us a chance to buy back some of those calls we sold on our positions. GOOG is holding up beautifully in a test above the 10 day EMA after its breakaway gap on earnings.

Semiconductors have been down, but they are interesting. Semiconductors are once again forming interesting patterns to bottom off of. HITT has had a fairly well-defined trading range since late 2010. We will see if it can make another bounce. It might be worth looking at a play. BRCM, with its great earnings this week, gapped it higher. It has tested and filled part of the gap. Look how it tapped the 10 day EMA and bounced to hold that late-May high as well.

Energy. Energy continues to be one of the leaders. HAL has faded back to the 20 day EMA, but it looks very solid to continue its run, as do many of the service sector companies. RDC has a very nice pattern. It has earnings early next week, but it has a neat pullback to an inverted head and shoulders. Very nice. We see a lot of good patterns in energy. Some stocks have already broken to the upside. Others just still look good. TSO sold back at the end of the week, but it held the 50 day EMA and is trying to rebound back to the upside.

Healthcare/Medical/Drugs. A great week for healthcare. Defensive, money flows their way. But they are also growth. We got into ZOLL about a week ago, and the stock blasted to the upside on tremendous earnings. We banked some very nice 20% stock gain. I do not recall what the options were. It was a very nice move. And there was pin action. ISRG surged, rallying 2.75% as well. On a $400 stock, that is a lot of points. Nice move to the upside. Others in the healthcare and drugs in general are looking positive. We have a position already in BIOS. It looks like it wants to make a break to the upside. Then there is our favorite software stock in healthcare, CERN. It decided to put a little giddy up into it, and it blasted to the upside on Friday on tremendous volume.

We still have leaders. With the indices still trading inside of their trading ranges and not breaking down, leaders will likely not break down either. They will test as we have been seeing. This test will give us a lot of buy points to the upside if the market continues to believe that Quantitative Easing has to come because the Fed has to get back into the game.

THE ECONOMY

Q2 GDP bad, Q1 revisions shocking.

1.3% versus 1.7% expected, 0.4% Q1, revised from 1.9%

Consumption: 0.1% versus 2.1% prior

Prices: 2.3% versus 2.0% Q1, revised from 2.5%

Employment Cost Index: 0.7% versus 0.5% expected, 0.6% prior

Positives:

Business investment +6.3%

Construction spending +8.1%

Chicago PMI falls but at least beats expectations.

Michigan Sentiment July Final is flat. Recession levels, but flat.

EU: Next in line. Moody's puts Spain on downgrade review.

TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:
Economy Summary Video

THE MARKET

SENTIMENT INDICATORS

VIX. There was a breakout to the upside surpassing the June peak. It is right in the midst of that big, March surge to the upside. But note the doji; it is a gap to the upside, a selloff, and then a recovery. Still a positive move, but it went nowhere after the gap. The sellers took their shot. The buyers then recovered and bounced it back up. You could say buyers, but it is also the fear index that bounced it back up as well. This could very well be the peak of this move. The overall stock indices have traded down to support and bounced. Maybe they want to go down to the bottom of the range.

Maybe SP500 will break the 200 day EMA and go down to those March and June lows. If so, volatility moves higher up toward the March levels. My point is that if the market feels QE3 will come, it will not sell out of the range. If that is the thesis we are following, then it should not sell out of the bottom of the range, pure and simple. The market will do what it wants. We will not stop it from doing that, but we are anticipating what may happen so we can be ready to act whether we are right or wrong. You have to be aware of the possibilities and set yourself up to take advantage of them. I always say we react and follow the market, but you have to follow it in time to make money. You cannot chase the bus. You have to figure out what can happen and what you believe will happen, and then be ready for any scenario.

This can very well mean that the market has hit its peak. Again, based upon the pattern and our thesis, there will be QE3.

VIX: 25.25; +1.51
VXN: 26.08; +0.96
VXO: 25.94; +2.47

Put/Call Ratio (CBOE): 1.2; +0.27

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: 49.5% versus 46.2%. Still rising despite a market selloff on the week, hitting a high on this rally but still below the highs from April and December (60% readings spanning December through early May 2011). The 5 year high is 62.0. The crossover level at 29% bulls from July 2010 is long gone. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 21.5% versus 21.5%. Holding steady after a steady decline, roughly holding the average level for the period November through early April. In April they fell sharply but the market sold and they climbed to a high to start July. Trending lower since. The 35% level is considered bullish for the market overall. 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: -9.87 points (-0.36%) to close at 2756.38
Volume: 2.291B (+9.88%)

Up Volume: 766.92M (-166.85M)
Down Volume: 1.52B (+400M)

A/D and Hi/Lo: Decliners led 1.36 to 1
Previous Session: Decliners led 1.03 to 1

New Highs: 30 (+4)
New Lows: 123 (+36)

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: -8.39 points (-0.65%) to close at 1292.28
NYSE Volume: 1.074B (+15.36%)

Up Volume: 1.34B (-180M)
Down Volume: 3.23B (+280M)

A/D and Hi/Lo: Decliners led 1.9 to 1
Previous Session: Decliners led 1.66 to 1

New Highs: 54 (+1)
New Lows: 220 (+92)

SP500 CHART: Click to view the chart

SP600 Chart: Click to view the chart

DJ30

Stats: -96.87 points (-0.79%) to close at 12143.24
Volume DJ30: 231M shares Friday versus 149M shares Thursday.

DJ30 CHART: Click to view the chart

MONDAY

What has driven the move to this stage? You know the answer as well as I do. It is not a great economic resurgence. The economy has never looked very good coming out of ye old bear market selloff that started back in late 2008. Massive liquidity from the Federal Reserve has helped fuel this twin rally off of the March 2009 lows. The initial run took the market into Q2 of 2010. A big base, and the second move on QE2 that was announced in August of 2010. Now the market is foundering again because the Fed has withdrawn QE2 and said it was not going to renew it. With the continually pathetic-and-falling economic data, the market figured (likely correctly) that we were going down into recession and the Fed would be compelled to act once more. That, I believe, is why the market is holding up in its trading range.

With the anticipation of liquidity that has driven the market higher, we can anticipate the market holding its range. Does not mean it will happen, but we can anticipate it will. If data is worse, the more likelihood the market will figure the Fed will have to step in once some kind of budget deal is arranged.

Then we look to next week. That makes this data germane because the market will be watching it to see if it is bad enough to keep the Fed in the game. Let's face it, the economic improvement we have had has not been good enough to drive these gains. If we have economic improvement now, the market will not take much heart in it because it is not a recovery. This is the 1930's and 1970's malaise that I have talked about many times. We are experiencing it right now, and the numbers continue to prove it.

The ISM will probably come in above 50. We have not had enough regions swinging negative. They are heading back to negative but not enough of them have gone that way. Midwest Automotive is keeping the Chicago area in expansion slower, but expansion nonetheless. That is holding up the rest of the country.

We also have personal income and spending. Very important given the sentiment and very important given the decline posted in the Q2 numbers. We have Challenger jobs and the ADP employment change. That will be important, but it is all a prelude to initial jobless claims on Thursday and the July nonfarm payrolls. The unemployment data. They are expected to show 78K versus the 18K the prior month. Hope truly springs eternal in the world of data forecasting.

The unemployment rate is supposed to fall to 9.1%. That is likely because the job pool will shrink versus any expectations that there will be more jobs out there. Not great numbers. The market will be paying attention, of course. If the numbers continue to be poor, the market will take initial hits and be sluggish as it was on Friday, but it will not likely collapse. Not as long as it has the belief that the Fed will come to its aid with new money to toss out of those helicopters. The question is whether it will be in bundles or if it will just flutter down upon us minions so we can scramble for it and try to stay alive as inflation continues to destroy our savings.

The action off of the lows on Friday was likely due to some short covering ahead of the weekend. After all, it was a very steep decline for the week. With the indices unable to break the 200 day EMA on the SP500, there was some covering to bounce stocks higher. It really was not a rush of buyers, but all bounces start with short covering. The market has set itself up well for a possible deal this coming week. It is poised to take advantage of any announcement over the weekend or on Monday of some kind of budget deal. Maybe it will happen. There was passage of the Boehner bill with the balanced budget amendment. That will never make it through Congress. I have my theories about whether it is insane or not, but that is not important.

The point is, the market is ready to bounce if there is a deal. There will probably be a compromise, and they will all walk away with nothing really done. $1T in cuts when we have $50T in debt means nothing. It is over 10 years at that. It is not an immediate chop of anything, so it really will not do much. It will just be kicking the can down the road to deal with at a later date, washing hands until after another election.

The market has set itself up for a deal, and if it is announced, it could bounce. If it is not announced, perhaps it breaks down and tries the June and March lows. That would still be normal trading range action. It could still break down. People feel like the Fed cannot rush in. If it is precluded from moving in because Congress and the President cannot get together on a deal, then the Fed might be put off. It does not want to interject itself into this discussion; it wants to wait until it is over and then act. The longer it takes for Congress and the President to reach a deal, the longer it will take for the Fed to announce any QE3. It has to have a certain requisite mourning period after the debt deal is signed before it can say we need QE3.

The market is looking for that. Again, the 2010 pullback and selloff ended with the announcement of QE2. Look at the 2011 market top; it is not really a base like it was in 2010. It has toppy action, in a range. The range has to hold, or else it is a breakdown and not a base. This action very much needs an announcement of some kind of QE3.

We will see what next week brings. We have some sectors and leaders that still look very good. Energy is still putting up good patterns for us. Healthcare is probably still generating some more, and that is a broad category. We may find an occasional retail or technical. The semiconductors are still down at the bottom of the range. If there will be a bounce, they are in perfect position to do so. We might also get some plays to the upside off of some indexes if the market is going to hold. We have many areas to try, and we have to be ready for them all.

We have our working thesis, but that does not mean it will pan out the way I think it will. One of the keys in the market is to be able to say "Well, I did not get that one right." Then you move on and take advantage of what is happening to make money. That is what we will do. That is what we have been doing and will always do. I will see you for what will no doubt be a very fun-filled and interesting week ahead.

Have a great weekend!

Support and Resistance

NASDAQ: Closed at 2756.38
Resistance:
The 50 day EMA at 2774
2796 is the February gap down point
2816 is the early April peak.
2825 is the 2007 closing peak.
2841 is the February 2011 peak
2862 is the 2007 peak
2879 is the July 2011 peak
2888 is the May 2011 peak
2956 from November 2000
3026 from October 2000 low
3042 is the May 2000 low

Support:
2762 is the February low
2759 is the May low
2723 to 2705 is the range of support at the bottom of the January to May trading range
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range)
The 200 day SMA at 2705
2686 is the January 2011 closing low
2676 is the January 2010 low
2645-2650ish from December 2010 consolidation
2603 is the March 2011 intraday low (post-Japan low)
2580 is the November 2010 closing high
2569 is the November gap up point through the April 2010 peak

S&P 500: Closed at 1292.58
Resistance:
1313 from the August 2008 interim peak
The 50 day EMA at 1315
1318.51 is the May low
1325-27 is the March 2008 closing low and the May 2006 peak.
1332 is the early March peak
1340 is the early April 2011 peak
1344 is the February 2011 peak is being challenged again
1357 is the July 2011 peak
1364 is the March 2007 low
1370 is the August 2007 low
1371 is the recent May 2011 peak

Support:
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1295.50 is the 61% Fibonacci Retracement
The 200 day SMA at 1284
1275 is the January 2010 low, early January 2011 peak
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1227 is the November 2010 peak
1220 is the April 2010 peak

Dow: Closed at 12,143.24
Resistance:
12,283 is the March 2011 peak
12,391 is the February 2011 peak
The 50 day EMA at 12,379
12,876 is the May high
12,754 is the July intraday peak
13,058 from the May 2008 peak on that bounce in the selling

Support:
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The 200 day SMA at 11,978
11,893 from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
11,734 from 11-98 peak
11,555 is the March low
11,452 is the November 2010 peak

Economic Calendar


- Case-Shiller 20-city Price Index, May (9:00): -4.51% actual versus -4.4% expected, -4.22% prior (revised from -3.96%)
- Consumer Confidence, July (10:00): 59.5 actual versus 56.0 expected, 57.6 prior (revised from 58.5)
- New Home Sales, June (10:00): 312K actual versus 320K expected, 315K prior (revised from 319K)

July 27 - Wednesday
- MBA Mortgage Purchas, 07/23 (7:00): -5.0% actual versus +15.5% prior
- Durable Orders, June (8:30): -2.1% actual versus 0.5% expected, 1.9% prior (revised from 2.1%)
- Durable Orders -ex T, June (8:30): 0.1% actual versus 0.5% expected, 0.7% prior (revised from 0.6%)
- Crude Inventories, 07/23 (10:30): 2.296M actual versus -3.727M prior

July 28 - Thursday
- Continuing Claims, 07/16 (8:30): 3688K expected, 3698K prior
- Initial Claims, 07/23 (8:30): 398K actual versus 415K expected, 422K prior (revised from 418K)
- Continuing Claims, 07/16 (8:30): 3703K actual versus 3688K expected, 3720K prior (revised from 3698K)
- Pending Home Sales, June (10:00): 2.4% actual versus -3.0% expected, 8.2% prior

July 29 - Friday
- GDP-Adv., Q2 (8:30): 1.3% actual versus 1.7% expected, 0.4% prior (revised from 1.9%)
- GDP Deflator, Q2 (8:30): 2.3% actual versus 2.0% expected, 2.7% prior (revised from 2.0%)
- Employment Cost Index, Q2 (8:30): 0.7% actual versus 0.5% expected, 0.6% prior
- Chicago PMI, July (9:45): 58.8 actual versus 58.0 expected, 61.1 prior (no revisions)
- Michigan Sentiment - Final, July (9:55): 63.7 actual versus 63.8 expected, 63.8 prior

August 1 - Monday
- ISM Index, July (10:00): 54.0 expected, 55.3 prior
- Construction Spending, June (10:00): 0.0% expected, -0.6% prior

August 2 - Tuesday
- Personal Income, June (8:30): 0.1% expected, 0.3% prior
- Personal Spending, June (8:30): 0.1% expected, 0.0% prior
- PCE Prices - Core, June (8:30): 0.2% expected, 0.3% prior
- Auto Sales, August (15:00): 4.1M expected, 3.86M prior
- Truck Sales, August (15:00): 5.2M expected, 4.98M prior

August 3 - Wednesday
- MBA Mortgage Index, 07/30 (7:00): -5% prior
- Challenger Job Cuts, July (7:30): 5.2% prior
- ADP Employment Change, July (8:15): 95K expected, 157K prior
- Factory Orders, June (10:00): -1.0% expected, 0.8% prior
- ISM Services, July (10:00): 53.1 expected, 53.3 prior
- Crude Inventories, 07/30 (10:30): 2.296M prior

August 4 - Thursday
- Initial Jobless Claims, 07/30 (8:30): 405K expected, 398K prior
- Continuing Claims, 07/23 (8:30): 3700K expected, 3703K prior

August 5 - Friday
- Nonfarm Payrolls, July (8:30): 78K expected, 18K prior
- Nonfarm Private Payrolls, July (8:30): 100K expected, 57K prior
- Unemployment Rate, July (8:30): 9.1% expected, 9.2% prior
- Hourly Earnings, July (8:30): 0.2% expected, 0.0% prior
- Average Workweek, July (8:30): 34.3 expected, 34.3 prior
- Consumer Credit, June (15:00): $5.0B expected, $5.076B prior