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InvestmentHouse Weekend Market Summary

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

- There you go again: paradise lost as another gain is thrown away.
- Buyers are hard to come by of late, but sellers have not taken over as indices are still at support.
- Retail rolls over even as consumers spike up their sentiment, food and gas inflation, slowing economic activity be damned.
- Still some solid leadership sectors even after 4 weeks of testing the QE3 fact move.
- PPI: Same old story as energy and food prices jump while other prices deflate, economy stalls. There is a word for this.
- All of those (part-time) jobs push Michigan Sentiment wildly higher.
- Sad state of the world when the Nobel Prize is now given not for deeds but for hope of change: EU wins peace prize.
- Time for QE3 to reassert itself . . . if stocks are going to avoid a deeper test below near support. Earnings will need to help.

Another day of blown gains, but another day of testing support as well.

For the third session NASDAQ and SP500 started higher, and for the second session built good intraday gains. The result, however was the same. The bids faded and stocks fell back to flat.

To many it looks as if the market is ready to roll over given the intraday action. It is certainly not the best, not the low to high intraday action that accompanied the rise into September. But then again, the market is in test mode and as it fades it tends to show this kind of action.

Moreover, while the buyers are losing out each session the sellers are not overwhelming the market. Volumes are overall quite modest, struggling to reach average. On the rally in September, NASDAQ trade was solidly above average on the move. No doubt the sellers are in charge now, but they are not crushing the market lower. The indices are sliding, but volume is not racing higher suggesting it is more a lack of buyers on a pullback versus a lot of funds dumping shares. Thus far the action suggests a good run higher through September on QE promise and finally QE fact, and now a fade to test that run.

The question is, how deep will the test be. SP500 is holding at the 50 day EMA and just over the 38% Fibonacci Retracement of the mid-July to September run. NASDAQ is holding near the 38% level as well as price support. DJ30 remains at the 50 day EMA and the up trendline. SP600 small caps are the most worrisome, but they did close out Friday at the 50% retracement; support, but they have lost some momentum. With the economy as it is, i.e. heading lower still after peaking in 2010, it is not surprising the small caps are struggling more than the other indices even with QE3's $40B/month injected into the financial system.

Nonetheless, the indices are, as I sometimes say, getting down to the lick log.

In other words this is the point where they are going to stop the pullback at this level with this modest, shallower test of near support and resume the move with good momentum, or they are going to falter and test further over time. Of course 'faltering' here does not mean a crash, just a deeper test. The patterns look good, at least for the large cap indices, there are a lot of good-looking stocks even as some sectors roll over, and there is a general belief stocks will fall further. Oh yes, and that $40B/month coming into the market. Not everything is bullish; VIX looks as if it could jump further here, putting in a higher low and building a bottom. As I said, the indices are at the lick log. They are going to make their decision here for either a shorter pullback and renewed upside or a deeper pullback and base. The current combination can yield good upside. Doesn't guarantee it, but we have seen this provide good moves before and we need to be ready for it, particularly given the continuing theme of QE3.

As noted, the action was not the best, tossing another gain into the hamper. Futures were up early but were backtracking as earnings were widely divergent. JPM beat on the top and bottom. WFC, however, missed on the top line as its margins for its mortgages were thinner. Hard to believe given WFC drives a hard line even with long term customers. AMD warned it would miss; not great but nothing new there and hardly going to crash the market on its own. JBHT (trucking) beat on the top but missed on the bottom. Nonetheless it jumped higher.

As you can see, earnings were widely divergent as some beat on the top but missed on earnings while others beat on earnings but missed on revenues. This is doing to be one crazy earnings season and the pre-market showed it with the futures up and down.

PPI screamed higher on food and energy. Otherwise it was flat. Good thing. We might have to start eating computers, televisions, and the other non-core items that the Fed says show there is no inflation.

Stocks still managed to bounce early and on a big beat by overly excited Michigan natives they spiked a bit more. That move enjoyed the half life of Astatine (125 nanoseconds or 0.000000125 seconds) and the market reversed. Within 30 minutes the indices gave up the gain and were negative even more than the early upside move. The action didn't get any better as a double bottom through lunch offered a bounce, but this didn't last either as stocks sold back again into the close.

SP500 -4.25, -0.30%
NASDAQ -5.30, -0.17%
DJ 30 2.46, 0.02%
SP600 -0.85%
SOX -0.53%

OTHER MARKETS

Dollar. 1.2951 versus 1.2932 euro. The dollar was down on the day. After acting as something of a safe haven in the early part of the week due to worries about Europe and the tensions in North Africa and around the Mediterranean, the dollar was enjoying some buying. It started to falter on Thursday and Friday. If you look at the pattern, even though the dollar has bounced a bit further than we thought it would, this is a very bearish pattern. Here is a shoulder spanning March and April, a rally into July, and a fall-over to the exact levels hit in late April and early May before the run started. There is the neckline and the head and shoulders pattern. It looks as if the dollar is now at the apex of the right shoulder (or darn close to it). This is a bearish pattern; there is no way to cut around it. You could say we may get a rally higher, but what do we have? There is the head and shoulders and a sharp selloff. Then there is a bounce, a higher low, and a higher high. That is your downside ABCD pattern. It hit resistance, or close to it, on the high. It does not look too good for the home team known as the greenback.

Bonds. 1.66% versus 1.67% 10 year US Treasury. Bonds continue to look stronger than you would think. But, again, what we had on the week was something of a safe haven trade with worries about Europe and other countries. South Korea cut rates, Brazil cut rates, and there is talk that the People's Bank of China will cut rates over the weekend. People are cutting rates everywhere.

We have QE as well. When others cut rates, even though the US has already announced QE3, it will bolster the dollar, plain and simple. So the dollar bounced on the week. On Friday it bounced through the trendline that started with the July peak. But it was a gap to a doji. This could be an evening star. We could see a gap back down. That said, a little inverted head and shoulders has still formed over the 200 day EMA. So, as unlikely as it seems, bonds could move higher. Why would that be? A safe haven also despite a stronger Michigan Sentiment, despite the Thursday jobless claims that were better than expected, and in spite of the prior Friday's unemployment rate that fell 3BP. The view of the economy just is not that good as per the bond market. Others may spin in any way they want to, but when you look at the bond market, it does not say that things are great. If that is the case, bonds would want to move higher. Moreover, if the economy would continue to weaken, the Fed would be compelled to buy bonds. Maybe that's what is being priced in, even with those three reports being better than expected, at least on the headlines. When you delve into the numbers as we have, they do not look that great, of course.

Gold. 1759.70, -10.90. Gold was down. Gold broke below the 20 day EMA where it has held. Now it looks a little weak near term. Maybe it will pull back some. As the dollar moved higher, it moved lower this past week. The dollar was down on Friday and gold still broke. As a fear index, maybe it has taken a bit out of it. If you think that world banks, including the Fed, will continue with the easy money as they did last week, gold would continue to rally. So the move was a little bit opposite of what you would have anticipated on the day. Overall it is still solid. It is just testing back.

Oil. 91.86, -0.23. Oil was down modestly on the session. It bumped up against the 50 day EMA, still unable to move back up after this pullback. Still a little bearish near term. The only thing that is really keeping it up is the tension in the world. There is Syria and Turkey, Iran inside its own borders, and the whole litany I have talk about before. Basically there is too much oil out there to hold prices higher. But, then again, there is enough worry in the world to keep money moving into oil as a safe haven. There is concern about what is happening in hot spots around the globe.

TECHNICAL SUMMARY

Internals.

Volume. NASDAQ -3.5%, 1.52B; NYSE -8%, 551M. Volume was lower. As the indices gave up a gain, again we can see that the sellers did not just pile on and drive it lower. It was just more of bids running out again. The market started higher, and bids could not hold. They pulled them, the bottom fell, and stocks slumped into the close.

Breadth. NASDAQ -2:1; NYSE -1.7:1. But breadth was not horribly negative. Decliners over advancers on the NYSE even with the small caps dropping -0.85%.

THE CHARTS

I will not spend too much time on the charts as I already discussed them at length.

SP500. SP500 is at the 50 day EMA and sitting right on top of those March 2012 highs. It has a good pullback, and it is in position to move. It is at that licklog. Is it going to bounce here and continue the move with good momentum to the upside, or will it go into a deeper, longer base and take some more time to work its way out?

NASDAQ. NASDAQ is a very similar picture, though not quite as pretty. It has broken its trendline on the week. It broke through the 50 day EMA, but it is holding some support near the 38% Fibonacci retracement, similar to the SP500. Obviously it is a little bit heavier, a bit more under water, but it is still capable of pulling off that ABCD pattern.

SP600. The small caps similarly struggled, and even more so on Friday. They can also put in that ABCD pattern, but they are getting to the point where they have to hold. They are at some support, and this is the true licklog for the small caps.

SOX. SOX sagged further, heading down to that next support level. It is an important one because it is the level that the index gapped through in June and then again in July as it came off of that double bottom. It is coming down to an important level around 364-365. It closed at about 367, so it is right there as well.

DJ30/DJ20. The DJ30 continues to look solid with a second doji at the 50 day EMA and the up trendline. That also puts in right on top of the March and April peaks. Pretty nice, textbook look here. There is a little bit of MACD weakness on the second high that was unable to follow-through. But we have had the selloff, and it is down to a very key level. That is called the licklog. It will have to make up its mind and choose one side of the fence or the other.

The DJ20 had a pretty good day with JBHT and some of the transports moving up on its earnings. Volume was up above average. They broke back higher off of this test of the 10 day EMA and 20 day EMA. It managed to hold the move through the 50 day EMA, though they gave up quite a bit of upside on the day. Just a good bounce, still moving laterally for now.

Overall the indices are hanging in there. They are making it harder for themselves. They are now at a point where they have to show they can move to the upside if they will continue from here.

LEADERSHIP

Big names. The big names are not looking too good. AAPL is struggling. It was down through the 50 day EMA and could not make the move higher. Moreover, it is below that important high from April. It has broken back down into the upper reaches of this April to August base. AMZN had a tough week. It broke through the 50 day EMA and tried to get back through it on Thursday, but it could not. It rolled back over. EBAY did move higher Wednesday through Friday, but it has lower volume. It is showing more weakness, and we are looking for a play to the downside.

Retail. Some retail stocks have come under fire. Not all of them, but some big names have faded. ROST has been in a fade for awhile now. It is heading down to the 200 day EMA. TJX is heading lower as well. TGT is another stock heading lower. What is the important thing about all of these? They are all in the discount sector and not performing that well. Look at the dive DLTR is in. These are not looking good. They have rolled over pretty hard. At the same time, WMT continues to perform well. Does this suggest that the economy is picking up? Does it suggest that things are really improving because the discounters are not doing that well? Or is it an indication that maybe the Christmas season is kind of slow? Earlier in the week we heard that EBAY and AMZN had slow September sales.

Some important stocks still look good in retail, but they need to move higher. LULU has a nice pennant that has shaped up. ULTA looks good at the 50 day EMA, but it had a tough week and fell hard down to that level. They will have to hold up and make their moves. CHS looks pretty good. We have a real tension level here. What will happen with this very important sector? Is it just a victim of its own success and these stocks are coming back, having to sell off to consolidate after a good run in anticipation of the holiday season? Or are they forecasting the holiday season right now with some of them rolling over? That is important.

Industrial. Industrials showed some life this past week. JOY is not bad at all. On the other hand, UTX had a tough week and sold down. CAT is trying to hold support, but it is not a pretty pattern at this point.

Energy. DWSN looks solid. PBR has a great pullback in place. There are some stocks positioning themselves to move to the upside. You have to like that.

Drugs. Drugs continue to set up pretty well. NEOG still has a good pullback underway. SUPN looks solid. Many stocks in the drugs continue to perform well.

Financial. And noted earlier, the banks were pretty good. They came under some pressure on Friday with earnings, but they are doing well. BAC reports next week. JPM was a bit down, but it still looks solid. They do not look bad, per se.

Homebuilders. KBH had a very nice pullback. Homebuilders still look good.

Metals. Metals are down a bit but holding up. FCX looks decent. ZEUS is pretty solid as well.

Surprisingly, some industrials look pretty good. We have some retailers looking good, but they are under pressure. Many retailers are breaking down. We still have some good stocks in good position. They are getting money put their way that can lead to an upside. We have early leaders, big names, and some of the retail fading. They are having a hard time. Are they going to drag the market down or are they just past their time? Are they just pulling back as the overall market tests and looking to give up the leadership, perhaps to these other groups, or put in their bases and come back?

I will say that stocks such as ROST have a ways to go. It does not look like it is just about to turn around. It is at the 200 day EMA, but it probably has to base out some more before it can move back to the upside. COH has already put in some time. Maybe it will move up, but it still has a somewhat bearish near term pattern.

THE ECONOMY

Michigan Sentiment spikes past expectations.

Yahoo! 532,000 new part-time jobs with no benefits! Let's go buy a house, a car . . . for Barbie dolls.

Michigan Sentiment, October (9:55): 83.1 actual versus 78.5 expected, 78.3 prior

Sentiment jumped to the highest since 2007. As Red Buttons used to say at the old Dean Martin Celebrity Roasts, is why? Why is sentiment rising when the economy is falling?

The question is why? Why is this person getting a dinner? When Sophia Lauren's new baby said 'Is that all for me?,' never got a dinner. When first baseman Joe Torre who was too chicken to play catcher because he said 'who wants to be known as chicken catcher Torre,' never got a dinner. When Dolly Parton, who told Mrs. Olson, 'yes they're mountain grown,' never got a dinner.

When incomes are down 8.2% and fell 1.1% in August alone, why is sentiment rising?

When the government reports that unemployment fell but the majority of the new jobs were part-time, bottom tier income level jobs, why is sentiment rising?

When only 10% of the businesses in the recent NFIB survey say they will hire in Q4, the busiest quarter of the year, why is sentiment rising?

When the number of business saying they will lay off workers in Q4 is climbing, why is sentiment rising?

When the fiscal cliff and 'tax-mageddon' are virtually unavoidable at this juncture, why is sentiment rising?

When healthcare costs, instead of going down $2500 in 2012 thanks to Obamacare are UP $2500 and will rise more in 2013, why is sentiment higher?

When food prices are surging as corn, milk, beef, and pork prices jump higher, why is sentiment higher?

When GDP, after the lowest peak in history for a recovery is trending lower again with just 1.25% growth in Q2 and likely lower in Q3 (indeed likely a recession), why is sentiment higher?

When 30,000 drones equipped with infra-red cameras and supersensitive listening devices have been approved by the federal government are about to rob you of every vestige of privacy, why is sentiment higher?

When you can, by virtue of the Defense Authorization Act, be deemed a terrorist threat in the sole discretion of the President or his authorized surrogates and can be taken from your home in the dead of night and whisked away to for indefinite military detention without charge, a hearing or so much as notification to your loved ones, why is sentiment higher?

If you do get fortunate enough to come up with a great idea and make money only to become a targeted '1%'er' simply because you found the American dream, why is sentiment higher?

Okay, I went a bit afield there, but you get the idea: there are very real economic (and some other thrown in for good measure) reasons that sentiment should be despondent. But, we do know that the American spirit is indomitable and it will rise if given half a chance. After 5 years of horrible economic conditions, and even as conditions worsen yet again after a very, very low 'peak' in 2010, US citizens are grasping at some straws of hope that things will once again get better.

Why would sentiment improve? Gasoline prices, after surging to over $5 in California, are seeing a respite of late. Lower prices are an immediately visible improvement that consumers can focus on unlike healthcare cost increases and coming tax increases and benefit cuts.

There is a lot of talk about the housing market bottoming, and as houses are still the largest asset most people have. Indeed even more so now given the massive losses in retirements and savings most households suffered in the financial collapse that were not rebuilt as the Fed inflated the financial markets with QE because most stayed out of the markets. The lag in wealth recovery is also hampered by conservative plays that keep people in cash or bonds yielding negative returns as people are afraid to use stocks as a wealth creation vehicle.

Some credit the stock market with some of the increase in sentiment though as discussed above, many are sitting this one out, not taking advantage of the Fed inflating asset prices to our advantage. Still, there is this imbedded view even with people who are not in the stock market that a rising stock market is a sign of economic health as at least SOMEONE is making money to spend in the economy. I remember as a kid I would hear the stock market reports and when it was rallying I would think that things were probably good in the economy even if I didn't own one penny of a penny stock.

The combination of housing improvement and the recent spate of better data re the ISM, unemployment, and jobless claims, no matter if the data contravenes all of the regional data (the ISM), is really not what it says it is (the unemployment/jobs creation data), and simply the length of time things have been so negative allows Americans to dream of better times.

The Problem: History shows that spending relies on incomes, not sentiment. The issue ahead is the continued decline in wages and drops in disposable income. Incomes are down 8.2% in four years and fell 1.1% in August 2012 alone. Disposable income has trended lower and is now in negative territory. Credit is still hard to come by. Without readily available credit, consumers cannot spend what they don't have as they have done in years past. Sentiment is up for now, but there is a full speed train heading the opposite way on the tracks.

EU awarded the Nobel Prize? For what? Mismanagement? Riots?

Drones, Egypt, Iran, Libya, Syria. Peace. Early Friday in Spain
Obama awarded NP for things he would do EU for what it hopes to do?
You would think they would learn to put it in escrow until performance matched promise.

I suppose Bernie Madoff was not available to receive this year's award given he is incarcerated. Still, the European Union receiving the Nobel Prize? For what? Irresponsible deficit spending, failing to properly screen entrants into the EU in the first place (bogus Greek and other economic numbers were ignored years ago)? Allowing its members to spend into oblivion as they bet others would foot the bill? Creating conditions so bad that riots occur in the streets? Greece unemployment at 30%? One-third of businesses in Athens closing? Spain unemployment over 25%?

I wondered above why sentiment would rise given all the negatives, borrowing from Red Buttons. How about borrowing a bit more? I mean, why does the EU get the glory when we have been just as 'successful' in pursuing peaceful endeavors?

When our Treasury and Federal Reserve artificially inflate asset prices by creating fiat money out of thin air while at the same time destroy the savings and futures of our seniors in order to bail out the government's profligate spending? Never got the Nobel Prize.

When Egyptians rise up and we 'lead from behind' and assist in the overthrow and killing of the only other friendly leader in the region to be replaced by an unfriendly regime to us and Israel? Never got the Nobel Prize.

When the Iranian citizens rose up two years ago and we watched via Twitter and You Tube as the young people were exterminated by the government and all we did was affirm we wanted to talk with the murderers? Never got the Nobel Prize.

When Syria's known thug dictator is slaughtering tens of thousands in its streets while the world stands by and watches? Never got the Nobel Prize.

When we kill US citizens abroad by drone strikes without trial, without due process? Never got a Nobel Prize.

Maybe that is what President Obama's 'pre-emptive' Nobel Prize was for, i.e. all of these 'peace enhancing' actions taken since he has been President.

THE MARKET

VIX. The VIX looks like it wants to make a bounce higher. Note how it broke through a support level. It came back to test it last week and bounced nicely on Friday. This even as the market really did not move significantly lower. It came off of an intraday high, but it did not break lower. This time volatility moved up. As I have been saying all week, it has kind of detached itself from the motions. When the market was up, volatility was higher. When the market was down, volatility was lower. That does not make a lot of sense. But looking at the pattern, it looks as if it is building a base and wants to spike higher. If it does, that means there is some upside in volatility, and that would be downside in the stock market.

VIX: 16.14; +0.55
VXN: 17.84; -0.49
VXO: 15.74; +0.7

Put/Call Ratio (CBOE): 1.05; +0.16

Bulls versus Bears

Bulls: 45.7% versus 46.8% versus 51.0% versus 54.2%. Okay, the bulls continue to fall as the market tests back. There is a pretty healthy skepticism. After all those fund flows we saw this week (10+B in a week) show the distrust. That is not bad for the upside: contrary indicator. Well below the 60% to 65% bullish levels that flash a warning sign. Back to the level from a couple of months back. Undercut 35%, the threshold for bullishness, in early June. As noted, hit 34% in early June. It did its job and the market is on the rally. Hard drop to 34 from 39.3% as economic reality and a choppy stock market hit. Off the 55+ level hit in late February. That was the highest level since April and May of 2011, the peak of the post-bear market high. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 25.5% versus 25.5% versus 24.5% versus 24.5% versus 25.5%. No more bears, no less. Still not at a high level. March and April saw lower lows in the 21% range. On the last run never made it to the 35% that can be a bullish indication, but the bulls were weak enough back in June. Over 35% is the threshold to be really be a good upside indicator. For 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: -5.3 points (-0.17%) to close at 3044.11
Volume: 1.527B (-3.48%)

Up Volume: 623.28M (-276.3M)
Down Volume: 866.41M (+182.39M)

A/D and Hi/Lo: Decliners led 1.95 to 1
Previous Session: Advancers led 1.52 to 1

New Highs: 40 (-19)
New Lows: 49 (+13)

SP500/NYSE

Stats: -4.25 points (-0.3%) to close at 1428.59
NYSE Volume: 551M (-7.7%)

A/D and Hi/Lo: Decliners led 1.7 to 1
Previous Session: Advancers led 1.94 to 1

New Highs: 98 (-14)
New Lows: 17 (0)

DJ30

Stats: +2.46 points (+0.02%) to close at 13328.85

MONDAY

A big week of data is coming up. We have retail sales on Monday and manufacturing out of New York. That will be important since it is one of the regions that has been down. Industrial production and capacity is on Tuesday. Of course we have the CPI. I guess that is important, but we will never really know about that because the Fed does not think food and energy are something we need to worry about. Housing starts are out on Wednesday. There are also initial claims. What will it be this time? Are we going to see the bounce back? Are we going to see another wild number? Then we have the Philly Fed on Thursday, and it is expected to improve. Existing home sales are out Friday. We have a lot packed in, not to mention a few earnings as well.

Ah, yes, the earnings. A lot more important earnings are coming out. BAC is coming up, but that is just one of many. The floodgates will start opening, and we will see some more reaction. The market was not overly favorable to earnings thus far, but the earnings have been wildly divergent. The interesting thing is they have not been as terrible as expected. One of the interesting features is that there have been beats on the top line. JBHT beat on the top line, and that was important. So while earnings may be lower, if they are showing more sales -- and in key groups such as trucking -- that is a positive for the market.

We have had a pullback into these numbers as the bounce from a couple of weeks ago has been given up and then some. Indeed, earlier in the week SP500 was below that move that started on the actual announcement of QE3. There is enough of a pullback to support. Or if there are topside beats, we could actually see the market rally. It is precarious right now, and that is why we said it is at the licklog. Will it be a situation where QE3 reasserts itself and stocks start to rise? If they want to avoid a deeper test and maybe a longer basing period, that is what they need to do. They will not necessarily do it; it is not a guarantee. With earnings, anything can happen. If another story comes out, then who knows? If something blows up in North Africa or the Middle East or even between Japan and China, then we will have problems once more.

We have a very full plate with a lot of dessert as well. That tends to make people shy away. With earnings we will do what we always do. It is hard to buy into stocks right before their earnings report. We are right in mid month. A lot of companies report at the end of the month and into November. We can still look for some plays on those stocks, but we would prefer to start picking up plays after we get the earnings. If it is in November, no problem. We can make those plays. But for the other ones, it gets problematical. The indices are in a position to run. We could get some good results. They have pulled back into the earnings, and they can make that move. That would be profitable.

We will look for the best. We look for solid plays that are in perfect position to move or that are in very good position to move. Then we can take advantage of them if they do get a nice bump. We would like a run into earnings, then we take some gain and get out of there. Or at least part of the gain. It just depends. We have been successful riding them through results in some situations, but it is always my preference to at least take part of the position off ahead of the results. If we get a boost, that is just some lagniappe.

Suffice it to say we will not be too eager to jump into a bunch of new positions right in the teeth of earnings season. As the results come out, we will get more of a feel for the way stocks are moving. If we get good plays off of the earnings, that is what we will focus on. Of course if there are some good downside setups and the stock is coming into earnings, that is often a good entry point even ahead of the results because the pattern forecasts something that is not great. With the "sell first and ask questions later" mentality right now, that can give you some quick downside moves to make gain, and then you can let them bounce back up.

I will see you on Monday. It is a packed week ahead, and we will take the shots as they set up.

Have a great weekend!

Support and resistance

NASDAQ: Closed at 3044.11
Resistance:
3076 is the late April 2012 high
The 50 day EMA at 3077
3090 is the mid-March interim high
3101 is the August 2012 high
The 20 day EMA at 3102
The June up trendline at 3109
3134 is the March 2012 post-bear market peak: broken, not forgotten.
3197 is the September 2012 post-bear market high
3227 is the April 2000 intraday low
3401 is the May 2000 closing low

Support:
3042 from 5/2000 low
3026 from 10/2000 low
3024 is the gap point from early May
3000 is the February 2012 post-bear market high
2999 is the bottom of the August 2012 consolidation
2988 is the July 2012 high
2962 is the April 2012 low
The 200 day SMA at 2957
2950 is the mid-April closing low
2942 is the mid-June 2012 high
2910 is the March 2012 low
2900 is the March 2012 low

S&P 500: Closed at 1428.59

Resistance:
1440 from November 2007 closing lows
The 20 day EMA at 1442
1446 is the June up trendline
1475 is the September 2012 high
1499 from January 2008
1539 from June 2007

Support:
1433 from August 2007 closing lows
1425 from May 2008 closing highs
1427 is the August 2012 peak
The 50 day EMA at 1426
1422.38 is the prior post-bear market high (March 2012)
1406 is the early May 2012 peak
1402.22 is the closing low of the August 2012 lateral consolidation
1378 is the February 2012 peak
1375 is the early July 2012 peak
1371 is the May 2011 peak, the post-bear market high
The 200 day SMA at 1369
1363.46 is June 2012 high
1359 is the April 2012 low
1357 is the July 2011 peak
1344 is the February 2011 peak
1340 is the early April 2011 peak
1332 is the early March 2011 peak
1325 is the July 2012 intraday low
1309 is the right shoulder low from June 2012
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
1266 is the June 2012 base low

Dow: Closed at 13,328.22
Resistance:
13,331 is the August 2012 post-bear market high
The 20 day EMA at 13,438
13,668 from 12-2007 peak
13,692 from 6-2007 peak
14,022 from 7-07 peak

Support:
The 50 day EMA at 13,307
13,297 is the April 2012, prior post bear market high
13,058 from the May 2008 peak on that bounce in the selling
13,056 is the February 2012 high
12,971 is the early July 2012 high
The 200 day SMA at 12,929
12,754 is the July intraday peak
12,716 is the April 2012 closing low
12,391 is the February 2011 peak
12,369 is the left shoulder low from May 2012
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
12,035 is the June 2012 base low
The June 2011 low at 11,897 (closing)
11,734 from 11-98 peak
11,717 is the late August 2011 peak

Economic Calendar

October 10 - Wednesday
- MBA Mortgage Index, 10/06 (7:00): 16.6% prior
- Wholesale Inventories, August (10:00): 0.6% expected, 0.7% prior
- Treasury Budget, September (14:00): $75.0B expected, -$62.8B prior

October 11 - Thursday
- Initial Claims, 10/06 (8:30): 339K actual versus 370K expected, 369K prior (revised from 367K)
- Continuing Claims, 09/29 (8:30): 3273K actual versus 3275K expected, 3288K prior (revised from 3281K)
- Trade Balance, August (8:30): -$44.2B actual versus -$43.8B expected, -$42.5B prior (revised from -$42.0B)
- Export Prices ex-ag., September (8:30): 0.7% actual versus 0.4% prior
- Import Prices ex-oil, September (8:30): 0.2% actual versus -0.2% prior
- Crude Inventories, 10/06 (11:00): 1.672M actual versus -0.482M prior

October 12 - Friday
- PPI, September (8:30): 1.1% actual versus 0.8% expected, 1.7% prior
- Core PPI, September (8:30): 0.0% actual versus 0.2% expected, 0.2% prior
- Michigan Sentiment, October (9:55): 83.1 actual versus 78.5 expected, 78.3 prior
- Treasury Budget, September (14:00): $75.0B expected, -$62.8B prior
- Treasury Budget, September (15:00): $75.0B actual versus $75.0B expected, -$62.8B prior

October 15 - Monday
- Retail Sales, September (8:30): 0.7% expected, 0.9% prior
- Retail Sales ex-auto, September (8:30): 0.6% expected, 0.8% prior
- Empire Manufacturing, October (8:30): -2.8 expected, -10.4 prior
- Business Inventories, August (10:00): 0.5% expected, 0.8% prior

October 16 - Tuesday
- CPI, September (8:30): 0.5% expected, 0.6% prior
- Core CPI, September (8:30): 0.2% expected, 0.1% prior
- Net Long-Term TIC Fl, August (9:00): $67.0B prior
- Industrial Production, September (9:15): 0.2% expected, -1.2% prior
- Capacity Utilization, September (9:15): 78.3% expected, 78.2% prior
- NAHB Housing Market Index, October (10:00): 42 expected, 40 prior

October 17 - Wednesday
- MBA Mortgage Index, 10/13 (7:00): -1.2% prior
- Housing Starts, September (8:30): 768K expected, 750K prior
- Building Permits, September (8:30): 815K expected, 803K prior
- Crude Inventories, 10/13 (10:30): 1.672M prior

October 18 - Thursday
- Initial Claims, 10/13 (8:30): 360K expected, 339K prior
- Continuing Claims, 10/6 (8:30): 3275K expected, 3273K prior
- Philadelphia Fed, October (10:00): -0.1 expected, -1.9 prior
- Leading Indicators, September (10:00): 0.2% expected, -0.1% prior

October 19 - Friday
- Existing Home Sales, September (10:00): 4.70M expected, 4.82M prior