Tuesday, October 31, 2006

Foreign markets fade on US GDP report, but US markets melt higher after weaker start

- Foreign markets fade on US GDP report, but US markets melt higher after weaker start.
- September PCE still not backing off much as consumers make more, spend less.
- October like September posts another gain, trying to set up for another move.

After Friday selling market overcomes a soft start, finishes mostly positive.

Stocks nursed a hangover from the Friday dump lower on the GDP and chip/PC story out of Taiwan, and futures were lower accordingly. Japan was down 2% and Europe was lower as well on the weak US report. WMT reported same store sales +0.5%, well off the 2% to 5% expected and the weakest showing in six years. Personal income was up more than expected, but spending was lower, barely scratching positive. Lacker was out after his last dissent stating consumer spending looks good. At least he is predictable, holding his line of reasoning regardless of what the data says.

Stocks took their lumps early with the indices fading below the Friday close, but the selling never got out of hand. Stocks bottomed within the first hour and began a drift higher pretty much into the close. Lower oil helped (58.38, -2.39) as always, giving stocks a reason to rise even when the buyers lacked any real strength. Volume was low and breadth was modest, but after the early pressure they drifted higher. It was basically a cessation of selling pressure that allowed stocks to revert to the trend, and that is still up.

Technically it was a better session of course, but as noted, it lacked much power. The low to high intraday action resumed once the sloppy early action abated and the sellers gave up. NASDAQ and SOX showed some renewed leadership with some individual solid moves, but they were hardly plowing new ground, still closing below the recent highs. There were some bounces in good, leadership quality stocks as noted, but mostly they are still setting up after NASDAQ tried the April high air and faded back. Indeed, NASDAQ remained below that April high it cracked last week, and it likely needs more work before it is ready to try again given it was pushed back rather quickly. Overall the bullish patterns remain in effect, though DJ30 and SP500, both still quite extended, struggled once more.

An interesting theme Monday was the rather bearish attitude expressed by most commentators. We heard 'overbought' quite a bit along with too many bulls and too long without a significant correction. Overbought is a relative term, but the latter two are both true. Bulls are getting higher, rising toward that 55% level considered bearish. The NYSE large caps have rallied since the July low and DJ30 is putting the moves on a 10% rise above the 200 day SMA. That suggests things are getting overdone.

At the same time all of that bearishness suddenly cropped up, and as we noted in the pre-market alert, even with the high bullishness among investment advisors, that sudden rush to the 'overbought' side of the ledger was in itself near term bullish. We note that it did not take much selling last week to jump the put/call ratio on CBOE over 1.0 on the close. While the overall view of the financial markets is getting more bullish with the average investor (at least 5 people last week started conversations with me with 'well, the market is up nicely, isn't it?'), there is still a hangover from the bear market. As soon as there is any hint of selling out come the comments that the run is over, time to clear out, etc. For now the market has not shown the kind of distribution that would suggest something serious is afoot; the market could easily consolidate more here, but again, at this juncture it is not broadcasting trouble.

The election might cause some bumps this week as investors try to figure out just how many seats the Dems win and how much to discount the changed rhetoric from Pelosi, Rangell and friends ('don't believe what I have done the past six years, believe what I am saying right now'), but as of yet the market is not showing the kind of choppy distribution that gets you on high alert for a decline. NASDAQ and its fight at the April high will remain the key battle point near term, and while techs were up Monday, they still look as if they have more work before they can really break higher regardless of the sentiment.


September incomes up, spending falls, but still solid when adjusted for inflation.

Incomes rose 0.5% (0.3% expected) while spending rose a less than expected 0.1% (0.3% anticipated). When combined with the WMT report of weak weekly same store sales that fueled the slowdown talk and indeed the general bearish attitude to start the week.

Funny thing about numbers, however, is that you can look at them from many different ways and as we often see, the headlines often don't tell the story, at least not the one worth telling. Spending was down in part because of lower prices for gasoline, and when adjusted for inflation spending rose 0.4%. Many economists commented after the numbers that the results showed healthy spending that was not shutting down as many hypothesized due to slowing housing price gains and even housing price losses.

PCE drops modestly from August, still 'discomforting' to Lacker.

There was no major continental shift in the second of the measures of prices the Fed watches, but it was lower. The core PCE for the month rose 0.2%, less than the 0.3% in August and up 2.4% year over year. That was also down, falling from the 2.5% reading in August.

Lower, but not low enough for the Fed's designated protagonist Lacker. He was speaking Monday again, and noted that inflation was still 'discomforting.' Lacker has dissented the Fed's pause the past three meetings, and remains opposed to the current policy given his view on how inflation runs its course. Many said after the Friday GDP report that Lacker was dead wrong, and while we think he is as well, it is not for the same reason. Inflation doesn't decline because output declines; as McTeer noted, increased output helps reduce inflation pressures.

Declining GDP does not mean inflation will automatically follow; that is the common misconception, just as a rising economy fosters inflation. As seen in the 1980's and 1990's and the early 1960's, that is just not the case. Indeed, while those were upside years with low inflation, the economy showed the flip as well, i.e. the back breaking high inflation of the 1970's when the economy was stagnant, when the US was supposedly past its prime and no longer a world economic power.

We have noted the past month that the Fed May talk the PCE and CPI as its primary indicators, but it does not appear to be walking that walk. Monday we noted a few economists suggesting the same thing, i.e. that the Fed may just not put as much weight on this as it indicates. Remember, those were Greenspan pets and in order to form a more perfect transition, Bernanke stated he would follow the Greenspan policies. As we have noted, the pause when the Greenspan indicators were on the rise is not something Greenspan would do, and thus we conclude that the Fed is really looking elsewhere, easing the markets into its view of the world of monetary policy. At some point it will have to start showing its hand; indeed, it may have started just that with Poole talking about the Fed needing to follow markets in its policy decisions. A small step, but the start is always a small step.



VIX: 11.2; +0.4
VXN: 17.99; +0.58
VXO: 10.65; -0.08

Put/Call Ratio (CBOE): 0.82; -0.21. Dropped back quickly, but again we note how easy it was for the ratio to jump back above 1.0 on the close at the first sign of any selling. Despite the bullishness that is now seeing the retail investor return, the ghosts of bursting bubbles and bear markets past are quick to rise in the investor psyche.

Bulls versus Bears:

Bulls: 52.7%, up modestly from 52.2% where it held for 2 weeks. Still advancing toward that 55% level considered bearish. Up from 49.5% and 47.4% before that. This has caught the April high and is moving closer to the January peak at just over 60%. 55% is considered a bearish indication.

Bears: 30.1%. Actually rose a bit from 30.0% as bears hold near 30% after dropping rather sharply from 35.4% before that and the 37.1% hit in July (the highest level in this entire cycle, easily clearing the 34.4% hit in late June back when bulls and bears kissed, just missing a crossover). It is still well above the 20% level considered bearish, and if it holds at a high level even as bulls move higher, it acts as a governor on the bullishness. Hit a new post-2002 high in that late June move, eclipsing the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005).


Stats: +13.15 points (+0.56%) to close at 2363.77
Volume: 1.761B (-22.6%). Volume fell off the map, coming in below average as NASDAQ opened lower and then rebounded for a modest gain. The lower volume on the selling is good, but the low trade as it rebounded shows no real buying interest, just a lack of sellers Monday. That indicates NASDAQ most likely still has some work to do before it can make a run at the April high stick.

Up Volume: 1.308B (+540.414M)
Down Volume: 429.096M (-1.064B)

A/D and Hi/Lo: Advancers led 1.22 to 1. Modest is about the only way to describe this action.
Previous Session: Decliners led 2.02 to 1

New Highs: 120 (-47)
New Lows: 38 (+2)

The Chart: http://www.investmenthouse.com/cd/^ixic.html

NASDAQ bounced right back after a lower open, posting a modest gain on below average volume. It did not charge back from the Friday dump lower that gave back Thursdays break above the April high (2376), but it did rebound above the near support at the 18 day EMA. About all you can say about that is that it stemmed that selling attempt. Not a bad thing obviously, but the lack of volume indicates NASDAQ may have some more work to do to clear that April high and make the move stick. As noted above, this is the next key battle for the market as NASDAQ tries to join DJ30 and SP500 with a new post-2002 high. It had it in its hands Thursday but could not generate any additional momentum in the face of the Taiwan report about motherboard sales. If it can break higher quickly on strong volume again, that would be a solid positive as it would affirm the same reasons NASDAQ is at this crossroads in the first place.

SOX (+1.13%) rebounded as well, leading the market in its percentage gain. That is often the case, up or down, given its higher beta. Nonetheless it too held where it had to (the 50 day EMA at 451) and bounced, showing some good individual moves as it did. As with NASDAQ it has to show more, but also, it is showing enough as it held the 50 day EMA in the selling from last week and continued working on its base. That is exactly what we want it to do for now.


Stats: +0.59 points (+0.04%) to close at 1377.93
NYSE Volume: 1.427B (-8.02%). Volume fell well below average as the large and small caps posted modest gains. No real volume to drive stocks higher but also no real interest in selling.

Up Volume: 669.318M (+281.873M)
Down Volume: 730.467M (-417.053M)

A/D and Hi/Lo: Advancers led 1.16 to 1. Basically flat on the session, matching the action.
Previous Session: Decliners led 1.82 to 1

New Highs: 163 (-92)
New Lows: 19 (+1)

The Chart: http://investmenthouse.com/cd/^gspc.html

SP500 was under pressure early along with the other indices, but held near the 10 day EMA (1374) on the low and bounced modestly. Not much of anything other than a test of the continuing uptrend and a hold at support. It remains extended but still in that strong uptrend as money continues to chase into large caps.

SP600 (+0.39%) struggled early, testing down toward the 18 day EMA (387) on the low and rebounding nicely to hold above the 10 day EMA (390) and post a modest gain along with the SP500 and SP400. The small caps broke higher on Thursday and then gave it back similarly to NASDAQ. Still solid, still looking for another break higher over that earlier October high (392.82).


The blue chips came back from a test below the 10 day EMA (12,062), posting a modest loss on very low, below average volume. No distribution, just another test of the 10 day EMA that has acted as support for the past 5 weeks; before that the 18 day EMA also acted as support. It may make the break below the 10 day EMA that has held the latter part of this run, and if it does that will be noteworthy. The 18 day EMA (11,986) would still likely try to hold the move higher. That certainly would not jeopardize the trend unless the 18 day fell into as well.

Stats: -3.76 points (-0.03%) to close at 12086.5
Volume: 206M shares Monday versus 277M shares Friday.

The chart: http://www.investmenthouse.com/cd/^dji.html


Employment cost index, Consumer confidence, Chicago PMI, and trick or treat. Monday stocks for the most part responded to the Friday worries about technology with a shoulder shrug and a drift higher. There was no conviction buying, but there was no selling with force either. Instead, stocks were shaking off the fog of a strong break higher Thursday followed by a quick fade Friday on growth worries mainly in tech. Even with that, NASDAQ remains perched near the April 2006 high, the post 2002 watermark (outside the Thursday close where it eclipsed that level for all of one day). That remains the key point for this most recent move as NASDAQ, after lagging the large cap NYSE stocks, is trying to join the fight, and the near term move for the market turns on whether it is successful.

As noted above, there may be some near term bumps from the election as the market really has to come to grips with a possible power change in Congress. To this point it has not only weathered that prospect, but it has prospered under it. The idea seems to be if the Dems take the House but the Reps can hold the Senate, some sort of standoff will ensue. There is this idea that gridlock is best for the market, but that is really a bogus analysis. They point to the 1990's under President Clinton as the example, but that was not gridlock. Gingrich on the republican side worked with Clinton and they cut spending, cut taxes on capital gains, and helped keep the prosperity rolling for a bit longer. The higher marginal tax rates ultimately played a role with the Fed draining money supply to choke off the economy, but the point is that it was not gridlock but actual compromise in order to move forward. If there is gridlock this time around what happens? The tax cuts expire and the Dems get what they wanted without taking affirmative action to look like tax hikers. As always, it is too easy to pigeon hole events, and often that analysis is wrong.

In any event, October is winding down and the market has escaped thus far with gains, just as it did in September. There was some last day selling in September and the first session of October, but that was just about it. That puts the market, as we heard all morning, overbought and overwrought. Somehow the market is not hearing it. This is all occurring because money keeps chasing stocks higher. At some point there will be a re-jiggering of this by on every pause mentality and a steeper correction will occur. If those chasing decide to wait for a pause, the pause will likely occur. The key is how far down they are willing to let stocks fall before they move back in.

There is a key mindset driving stocks higher right now as well, and that is the 'traditional' run to the year end. Of course that is often preceded by a September and October that show a bit of selling, something not seen in those months in 2006. Thus tradition can be upset by earlier success where there is usually some selling. It is a pickle, but as we have noted before, you don't want to buy DJX or OEX right now as they are indeed overextended. On the other hand, their pullback may be NASDAQ's breakout as money rotates around the market. Indeed, there has been no sign of vigorous selling that would indicate money leaving the market. Thus we anticipate that if money comes out of DJ30 and SP500 it will find its way into the techs and small caps until the big money buyers decide the large caps have pulled back enough to make the large cap industrials 'values' again.

Tuesday and the rest of this week we remain looking at NASDAQ and the SP600 and how they react around the recent highs. NASDAQ hardly looked ready to take on the April high Monday, rebounding yes, but not coming close to the April high or the kind of volume it will need to make the break stick. We saw some leaders move higher Monday, and we will continue watching those; as more start to make the break higher on volume, you can start to infer the indices will follow. That is why we typically are buying into the leaders as they break higher even though the market overall may be lagging that move initially. As long as the overall market continues showing healthy action we can step out ahead of things with some confidence. We were doing that some Monday and we will continue to do so Tuesday and then go have some tricks and treats.

Support and Resistance

NASDAQ: Closed at 2363.77
2368 is October handle high.
2376 is the April high, the post-2002 high. Just cracked through this level.
2384 is an interim peak from January 1999
2493 is an interim peak from February 1999

The 10 day EMA at 2351
The 18 day EMA at 2334
2333 is the top of the Q1 2006 trading range (the January and mid-March 2006 highs)
2316 from interim tops in January and March 2006 trading range
2273 is the recent September peak
The 50 day EMA at 2270
2250 is the March 2006 closing low.
2234 is the June 2006 peak (intraday)
2232 is the August 2004/April 2005 up trendline
The 200 day SMA at 2229

S&P 500: Closed at 1377.93
1389 is a low from November 1999
1398 is a low from January 2000
1401 is a low from April 2000

1378 is a low from May 2000
The 10 day EMA at 1374
1371 to 1373 is the December 2000 peak and the January 2001 peak
The 18 day EMA at 1366
1358 to 1362 mark a series of peaks from April 1999 to August 1999 high and the February 2002 low at 1360.
1339 is the late September closing high
The 50 day EMA at 1338
1334 is an October 1999 peak
1326.70 is the May 2006 high
1324 to 1329 from the October 2000 lows.

Dow: Closed at 12,086.50
Still climbing up the 10 day EMA but still struggling a bit. Back down to 7.5% above the 200 day SMA. It tends to begin struggling when it gets to the 10% level where it typically will start to falter.

The 10 day EMA at 12,062 has acted as support all the way up. When it breaks on the close that is noteworthy.
The 18 day EMA at 11,986. Likely to hold at least temporarily if the 10 day EMA breaks
11,750.28 is the prior all-time high
The 50 day EMA at 11,730
11,723 is the January 2000 closing high
11,670 is the May intraday high
11,642 is the May 2006 closing high
11,488 is the early September high.

Economic Calendar

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

October 30
Personal income, September (8:30): 0.5% actual versus 0.3% expected, 0.4% prior (revised from 0.3%)
Personal spending, September (8:30): 0.1% actual versus 0.3% expected, 0.2% prior (revised from 0.1%)

October 31
Employment cost index, Q3 (8:30): 0.9% expected, 0.9% prior
Chicago PMI, October (10:00): 58.0 expected, 62.1 prior
Consumer confidence, October (10:00): 107.8 expected, 104.5 prior
Trick or Treat (6:00 on)

November 1
Construction spending, September (10:00): 0.0% expected 0.3% prior
ISM, October (10:00): 53.0 expected, 52.9 prior
Crude oil inventories (10:30): -3.2M prior

November 2
Initial jobless claims (8:30): 310K expected, 308K prior
Productivity, Q3 preliminary (8:30): 1.1% expected, 1.6% prior
Factory Orders, September (10:00): 3.6% expected, 0.0% prior

November 3
Non-farm payrolls, October (8:30): 125K expected, 51K prior
Unemployment rate (8:30): 4.6% expected, 4.6% prior
Hourly earnings (8:30): 0.3% expected, 0.2% prior
Average workweek (8:30): 33.8 expected, 33.8 prior
ISM Services (10:00): 54.5 expected, 52.9 prior

End part 1 of 3 Begin part 2 of 3

New plays contained in part 3



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DATE: date play first appeared on report.

PLAY: Denotes the type of pattern or play.
Upside play types: Asc Tri=Ascending triangle; BO=Breakout; Cup=Cup base; Cup hdl=Cup w/handle; DB hdl=Double bottom w/handle; Dbl btm=Double bottom; Flat=Flat base; FlyPlat=Flying Plateau; Pennant=Pennant; Rv H&S=Reverse head & shoulders; Saucer=Saucer base; Test 18=Testing 18 day MVA; Test 50=Testing 50 day MVA; Test BO=Testing the breakout (could be 10 day MVA test, etc.) Downside play types: CCall=Covered Call; Dsc Tri=Descending triangle; Dbl Top=Double top; H&S=Head & shoulders; Put (generic downside);

PIVOT=Buy point

Tgt=Target stock price for the play. Applies to stock and options.

Vol=Volume for the most recent session.

TgtV=Target volume to enter the play.

Stop=Stop advisory point. This is advisory and we may or may not exit a play if it hits this level depending upon Market conditions.

PLAY STATUS: Buy not hit (stock has not hit buy point); Buy not issued (stock has hit buy point but did not enter due to weak volume, poor intraday action, poor Market action); Current (ongoing play already entered); Entered today (entered the play that session); Exited (closed the position); Target hit (play hit initial target; will note if took all or partial gain or let run further); Trailing stop (exited using a trailing stop loss).

Upside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
AAPL 10/12 DB hdl 80.42 +0.01 75.55 88.00 18M 32M 79.08

AAPL 08/21 Cup hdl 80.42 +0.01 68.12 78.00 18M 40M 78.35
Current. Bounced off the 10 day MVA on low volume. Moving up after routine pullback.

AKAM 10/21 Test 50 45.81 -0.64 47.20 55.95 5.9M 7M 47.45
Current. Gapped down showing a doji on the 50 day MVA on slightly above average volume. Should be ready to bounce from here

AOB 10/24 FlyPlat 7.20 +0.20 7.29 8.94 1.1M 700K 6.88
Current. Solid volume as AOB bounced off the 10 day EMA after the Friday test.

BEAV 10/24 DB hdl 26.11 +1.05 25.77 29.65 3.3M 1.4M 24.95
Entered today. Big gap up for a nice gain showing a doji on very strong volume surge. Filled the gap intraday. Came off the day's high of 26.94.

BONT 10/03 Cup hdl 35.56 -0.59 32.20 38.45 393K 370K 35.95
Current. Fell to the 18 day EMA on rising trade. This is where it has to hold the pickles.

BRCM 09/25 Test 50 29.94 +0.75 30.96 35.68 14M 17M 29.32
Current. Tested the 18 day MVA intraday and rallied back for a great move on lower below average volume. Moving up after testing support at 27.

BWS 09/21 Cup 39.32 +0.54 35.56 40.88 104K 296K 38.55
Current. Bounced off the 10 day MVA for a nice gain on low volume. Continue with the uptrend.

CHIC 10/14 FlyPlat 28.76 +0.22 28.94 33.95 134K 700K 27.48
Buy Not Issued. Tested the 18 day MVA intraday and rallied back on low volume. Meeting some resistance at 29.

CMG 10/23 Cup hdl 59.05 +0.63 57.12 66.98 720K 1M 56.98
Current. Tested the 10 day MVA intraday and rallied back on low volume. Continue with the uptrend.

CMRG 09/06 FlyPlat 14.92 +0.31 11.83 14.00 369K 460K 14.32
Current. Came back from the high volume Friday drop, rebounding and holding the high. Still solid.

COH 10/21 Cup hdl 40.00 +0.99 36.11 41.95 4.7M 4.5M 38.45
Current. Great move up the 10 day MVA on much stronger above average volume.

CRM 10/18 Test BO 39.78 -0.33 41.44 49.45 1.5M 2.2M 39.35

CRM 09/12 Cup hdl 39.78 -0.33 36.61 42.95 1.5M 3M 39.48
Trailing Stop. Rebounded to hold the 18 day EMA on the close after undercutting that level early.

CWTR 09/16 Cup hdl 30.52 +0.31 29.16 35.35 664K 1.6M 29.52
Current. Continue to trend higher on low volume.

DIOD 10/23 Test BO 43.02 +0.26 44.55 52.95 351K 699K 42.38
Buy Not Hit. Tested support at 42 and rebounded though volume remained low.

FORR 10/11 Cup hdl 31.82 +0.40 29.94 34.78 108K 189K 30.39
Current. Continued higher though volume fell way off after the strong trade Thursday and Friday.

FTEK 10/14 Test BO 19.85 -0.81 18.35 21.98 489K 245K 19.32
Current. Faded from the Friday doji after gapping higher. Volume was lower though still well above average. Coming back to test the 10 day EMA.

GES 10/28 FlyPlat 56.15 +1.06 56.78 65.45 401K 850K 53.92
Buy Not Hit. Still low volume as it moves laterally in the plateau.

GME 10/21 Test BO 50.89 -0.75 52.21 60.45 1.3M 1.7M 50.22
Buy Not Issued. Pullback tapping 50.46 at the intraday low and rallied back holding the 10 day MVA on rising, but average volume. Meeting some resistance at 52. Still in the pattern.

GME 10/11 Cup hdl 50.89 -0.75 49.84 58.95 1.3M 2.1M 49.65
Current. Continues working laterally over the 10 day EMA as volume moved up to average.

GYMB 10/18 Test BO 46.65 -0.56 46.35 52.95 782K 1.6M 46.24
Current. Pullback holding the 10 day MVA on low volume. Typical pullback.

GYMB 09/19 Cup hdl 46.65 -0.56 37.52 44.68 782K 1.4M 44.22

HMSY 10/21 Cup hdl 13.53 -0.15 14.41 17.38 141K 331K 13.39
Buy Not Hit. Pullback holding the 10 day MVA on lower below average volume. Still forming the handle.

HOC 10/10 Dbl btm 47.73 -0.41 46.82 54.50 530K 1.2M 47.11
Current. Pullback tapping 47.16 at the intraday low and rallied back holding the 10 day MVA on low volume. Looking for a rebound from here.

HPOL 09/14 Test BO 6.68 -0.13 6.15 7.44 1.4M 330K 6.38
Current. Huge volume as it turned back some of the gains from Thursday and Friday. Not a breakdown by any stretch, but watching the trade as it comes back from that high.

IAAC 10/28 Test BO 29.80 +1.63 29.72 35.75 408K 358K 27.41
Entered today. Gapped higher on solid volume though closed off the high, unable to hold over 30. Would like to see it over there quickly.

ICE 10/18 Test 18 82.14 -2.32 83.64 94.95 1.5M 2.4M 80.32
Current. Pullback holding the 18 day MVA on rising volume. Should hold here and rebound.

IDCC 10/16 Cup hdl 35.99 -0.30 35.76 42.49 631K 1.4M 35.88
Current. Faded back to the 10 day EMA on the low but very low trade.

IM 10/25 DB hdl 20.64 +0.13 20.84 24.95 849K 1.5M 19.98
Current. Started lower but held the 10 day EMA on the low and rebounded for a gain albeit on lower, average trade. Par for the session.

INTC 09/26 Test 50 21.26 +0.16 20.51 24.75 39M 60M 20.89
Current. Low volume relief bounce from Friday. Critical time for INTC after failing to take out the early October high last week.

IO 10/05 Cup hdl 11.17 -0.01 10.77 13.00 416K 750K 11.18
Current. Nice doji that held the 10 day EMA on the close. Good low volume test and shakeout.

ISE 10/14 Cup hdl 51.96 +0.41 51.44 58.95 571K 833K 52.45
Current. Bounced off the 10 day MVA on low volume. Moving up after filling the gap.

IWM 10/24 Cup hdl 76.47 +0.33 76.20 79.25 50M 55M 75.77
Current. Gapped down at the open and rallied back on above average volume. Continue with the uptrend.

JCG 10/25 Test 18 30.90 -0.68 31.85 37.95 446K 400K 31.85

JCG 09/30 Test BO 30.90 -0.68 29.94 35.55 446K 500K 31.95
Trailing Stop. Thought about hanging in with it but a bit too volatile even though a young stock and it was closing well off the 18 day EMA.

JCP 09/26 Asc Tri 77.06 +0.81 70.05 79.95 1.7M 4M 75.38
Current. Continue to trend higher on low volume.

LQDT 10/26 Test BO 17.62 -0.26 18.24 21.95 132K 200K 16.96
Buy Not Issued. Pullback on rising, but average volume. Typical pullback. Still in the pattern.

LTD 10/03 Cup hdl 29.45 +0.22 28.40 32.95 1.2M 3.1M 28.85
Current. Nice modest continued climb up the 10 day EMA. Volume still well below average.

MA 10/28 Flat 72.54 -0.10 73.11 8775.0 1.7M 2.3M 69.94
Buy Not Issued. Pullback testing the 10 day MVA intraday and rallied back showing a tight doji on low volume. Still in the pattern.

MDRX 10/14 Test BO 23.62 -0.52 24.20 28.38 770K 1M 23.62
Current. Gapped down and continued to move down below the 18 day MVA holding at some support on much lower, but average volume. Should rebound from here.

MDRX 09/19 FlyPlat 23.62 -0.52 22.31 26.55 770K 1.1M 23.62
Current. Gapped down and continued to move down below the 18 day MVA holding at some support on much lower, but average volume. Should rebound from here.

NICE 10/26 Test BO 30.82 +1.09 30.68 35.95 221K 300K 29.62
Entered today. Tested the 18 day MVA intraday and rallied back for a great move on rising volume.

NTLI 10/25 Cup 27.07 -0.16 27.62 31.95 1.7M 3.5M 26.38
Current. Volatile session tapping 28.48 at the intraday high, but gave it back on low volume. Still in good shape.

NVDA 10/03 Test 50 32.77 +0.39 28.26 32.50 7.9M 17M 32.32
Current. Bounced showing a doji on the 10 day MVA on low volume.

NVEC 10/14 Test 50 44.49 +4.44 33.75 40.00 1.9M 580K 42.45
Current. Great move up the 10 day MVA on excellent volume surge making a 52 week high.

OPSW 09/30 Cup hdl 9.14 -0.08 9.13 10.97 560K 950K 9.18
Current. Pullback holding the 18 day MVA on low volume. Looking for stock to rebound from here.

PLCE 10/11 Cup hdl 70.28 +0.76 66.56 76.75 729K 922K 68.31
Current. Continue to trend higher on strong volume surge.

PLCE 09/14 Test 20 70.28 +0.76 59.85 68.00 729K 800K 67.45

PRFT 10/19 Test BO 17.00 +0.05 17.31 20.74 482K 500K 16.35
Buy Not Issued. Pullback holding the 10 day MVA on stronger above average volume. Still in the pattern.

QSII 10/19 Cup hdl 42.42 +0.77 42.65 49.95 308K 426K 40.98
Current. Up but on low volume as it continues moving laterally over the 18 day EMA.

RNWK 10/05 Asc Tri 10.74 -0.17 11.67 13.98 1.4M 2.2M 11.11
Current. Managed to recover to hold the 50 day SMA on the close after a gap lower. This is its second test of this level with similar action. Needs to show the bounce here.

RVI 10/10 Cup hdl 17.22 +0.31 17.35 20.95 120K 500K 16.48
Buy Not Issued. Still working on the handle. Still.

SIGM 10/09 Cup hdl 20.42 +1.20 16.09 19.39 1.1M 928K 18.62
Current. Explosive move off the 10 day MVA on excellent volume surge making a new high.

SMSC 10/03 Cup hdl 31.25 +0.48 29.21 34.75 170K 504K 31.22
Current. Tested the 18 day MVA intraday and rallied back on low volume. Moving up after testing the 50 day MVA.

SMSI 10/18 Test BO 18.52 +1.63 17.77 21.38 2.7M 1.1M 16.75
Entered today. Tested the 10 day MVA intraday and rallied back for a great move on excellent volume surge.

SMSI 10/04 Rev HS 18.52 +1.63 15.23 17.98 2.7M 1.5M 17.77
Target Hit.

SPTN 10/24 Test BO 21.25 -0.02 20.85 25.38 150K 265K 19.98
Doji on the second day of the test of h lat week's break higher.

STLD 10/28 Cup hdl 60.05 -1.13 62.22 72.45 1M 2.1M 59.95
Buy Not Hit. Announced a split but had no traction on the session,
fading to test the 10 day EMA on continued below avg

SUPX 10/28 Test BO 44.70 +0.10 44.88 52.95 248K 250K 42.55
Buy Not Hit. Showing a doji on rising volume. Looking good.

TWGP 10/03 Test BO 35.70 +0.35 33.65 39.95 140K 250K 34.48
Current. Tapped 35.07 and rallied back on low volume. Moving up after testing the 18 day MVA.

UARM 10/19 Test BO 46.74 +0.12 45.85 54.95 600K 1M 45.95
Current. Showing a doji on the 10 day MVA on below average volume. Should continue to rebound from here.

ULTI 10/21 Test BO 24.89 +1.02 25.12 29.95 433K 287K 23.89
Buy Not Hit. Nice bounce on volume. Looks ready to make the breakout move.

End part 2 of 3 Begin part 3 of 3


Weekend play results:
GES: No volume
IAAC: Nice break higher
MA: Trying but not quite there
STLD: Announced a split, fell to the 10 day EMA
SUPX: Nice test still underway.

New Plays:


Play Date: 10/30/2006
COL (Rockwell-Collins--$58.27; +0.37; optionable): Aerospace/defense
EARNINGS: 11-1-06 before the open
STATUS: Cup w/handle. Low, below average volume as COL continues to work laterally the past two weeks over the 10 day EMA (57.90). Nicely formed 6 month base that used the 200 day SMA (54.00) on the lows as support. Solid 6 to 4 accumulation in the base shows solid buying (6 up price weeks on rising volume to 4 down price weeks on rising volume). Money flow continues to move higher and we look for COL to make the breakout from this excellent pattern.
Volume: 568.6K Avg Volume: 693.755K
BUY POINT: $58.88 Volume=1M Target=$67.75 Stop=$57.24
POSITION: COL DL - Apr. $60c (52 delta) &/or Stock

Play Date: 10/30/2006
FCFS (First Cash Financial--$21.88; -0.29; no options): Credit services
EARNINGS: Reported earnings 10-18-06
STATUS: Reverse head and shoulders. FCFS is bumping up against the breakout and a new all-time high, making what looks to be a higher low Monday with a tap toward the 18 day EMA (21.52) and a recovery to close above the 10 day. Nice, patient 6.5 month base from this stock that sports some of the top earnings growth rates in the market. Solid 6 to 4 accumulation in the base (6 up price weeks on rising volume to 4 down price weeks on rising volume) shows solid buying complemented by strong money flow rising ahead of price. Just waiting for the volume to jump as it makes the breakout move.
Volume: 196.079K Avg Volume: 306.548K
BUY POINT: $22.48 Volume=450K Target=$26.95 Stop=$21.35
POSITION: - Stock (no option chain)

Play Date: 10/30/2006
JSDA (Jones Soda--$9.91; -0.28; no options): Soft drinks
STATUS: Cup w/handle. Working on a two week handle to its 22 week base, setting up nicely for the breakout toward a new all-time high. A new issue in November 2005, this is JSDA's first big base. Very nice action showing positive accumulation. Monday it reached down to the 18 day EMA on the low (9.55) and snapped back to close above the 10 day EMA. Good shakeout that you want to see during the handle formation. Now we just wait for the breakout move.
Volume: 320.524K Avg Volume: 223.854K
BUY POINT: $10.41 Volume=336K Target=$12.49 Stop=$9.68
POSITION: - Stock (no option chain)

Play Date: 10/30/2006
VTAL (Vital Images--$31.50; +0.86; optionable): Software
EARNINGS: 10-31-06 before the open
STATUS: Cup w/handle. Earnings are out before the open and volume was up Monday as VTAL moved off the 50 day EMA (30.15), setting up for the breakout from its 7 month base. Excellent action setting it up for a new all-time high. Looking for earnings to give it a boost higher and give us a buy point.
Volume: 215.8K Avg Volume: 130.291K
BUY POINT: $32.12 Volume=200K Target=$38.58 Stop=$30.05
POSITION: HXQ DF - Apr. $30c (65 delta) &/or Stock

Continuing plays ready to move:

Play Date: 10/21/2006
ULTI (Ultimate Software--$24.89; +1.02; no options): Internet software
EARNINGS: Reported 10-24-06
STATUS: Breakout test. ULTI surged out of a 5 month base in early October and then came back to test for two weeks, tapping at the 50 day EMA (23.36) on the low last week and bouncing. Volume rose Monday as it continued higher again. Excellent action that is ready to take it to a new all-time high.
Volume: 433.311K Avg Volume: 187.894K
BUY POINT: $25.12 Volume=287K Target=$29.95 Stop=$23.89
POSITION: - Stock (no option chain)

SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.


AAPL: Testing the 10 day EMA, holding that level for now.

CELG: Up after hours after a good session

ISE: Holding the 10 day EMA, looking ready to resume its move.

MA: Still looks ready

WEBX: Trying to hold the line at the 90 day MA.

By: Jon Johnson, Editor

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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Thursday, October 12, 2006

Tired market can't get past FOMC minutes, Cory Lidle plane crash

- Tired market can't get past FOMC minutes, small plane crash.
- FOMC minutes hark back to impatient Feds of old.
- Bond market a bit early on the rate cut rally.
- After trying to spark a rally Wednesday, chips are going to be a drag on lowered outlook

Market won't rise, won't sell.

Earnings had the market in a poor mood pre-market. Alcoa missed, Monsanto had some weak guidance, and DNA's strong report was questioned on some drug sales levels. North Korea was threatening another nuke test as well. With the FOMC minutes coming out in the afternoon, investors were not in the mood early on.

SOX, however, was trying to stir the pot. It was up early and jumped to a 2% gain, pulling NASDAQ along with it. SP500 and DJ30 struggled to advance, but moved higher as well. At 1:00ET, however, they peaked when the Fed's Lacker reiterated his Greenspan-like 'kill inflation at any cost' stance; Lacker wants to see inflation trending lower before the Fed stops hiking rates. That is very much Greenspan-like, but unfortunately it is the exact mindset that leads the Fed to overshoot 13 out of 15 times and send the economy into a tailspin.

On top of that the FOMC minutes came out and the theme was an inflation lament with some members trying out martyrdom with comments about the Fed losing its credibility if it didn't hike while inflation was outside the Fed's comfort range. That tossed cold water on the markets, equity and debt. Bonds sold, stocks sold. The market is tired of the Fed beating a dead horse; commodities have peaked, energy has peaked, accurate leading indicators show inflation has peaked. It is amazing how the Fed gets stuck in a perceptions game ('oh, the markets may think we are pussies if we don't hike rates until the economy stalls') versus doing its job.

In any event, stocks took an immediate hit, but they were on the comeback when a small airplane crashed into the twentieth floor of an apartment tower on 72nd street in NYC. The initial fear in NYC is always terrorism, and that pushed stocks lower. It became apparent fairly quickly, however, that it was a terrible accident as opposed to anything nefarious. The market rebounded, but the extra kick down on the plane crash news kept the indices from turning positive by the close. SOX was the holdout, but from the looks of some strong after hours earnings yet weak guidance from LRCX, it won't be the holdout on Thursday, at least to the upside.

Technically it was another nonevent for the most part. DJ30 and SP500 continued their lateral moves, refusing to give back any gains, tapping the 10 day EMA on the low and rebounding. NASDAQ showed a bit of the same action, once more stalling near 2320 on the high. Volume was up on both indices, a significant jump on NASDAQ. That shows a bit of churn after breaking higher last week and bumps against the top of the Q1 range. Some of that volume was attributable to the semiconductors taking the lead, but that cannot account for the entire increase. That is a bit of a concern, but overall the action remains solid. A bit overextended, but solid. It remains to be seen if the weak guidance by LRCX that sank the chip equipment makers late in the after hours session (after an early surge higher) will prove to be the final straw that sends some tired indices lower.


FOMC minutes reflect recent hawkish Fed speeches.

Bernanke is the moderate, at least what we see in public. The September FOMC minutes did not reflect his rather sanguine commentary earlier this week, instead addressing what we heard from his underlings all week regarding inflation being too high and the Fed ready to hike if necessary. All in all it was a hawkish statement, at least for financial markets tired of having the Fed run roughshod over them for two years.

The Fed focused on two primary areas: housing and, of course, inflation. The Fed remains concerned that the housing slowdown will have deleterious effects on the economy, but it noted that the housing slide was not having spillover effects on the rest of the economy. It appears that though the Fed is concerned about housing, the fact that inflation is not dropping as quickly as some want appears to be trying many FOMC members' patience.

The Fed spent a lot of time on inflation, never a good signal. While prices had moderated since the spring, thanks mainly to energy, the Fed still saw inflation (based on its indicators) running beyond the Fed's stated comfort zone. That is a problem because in stating a level it wants inflation it has boxed itself in. Several members worried that the Fed would lose credibility if it did not attack inflation while it was above its target level. That is very bad news. When the Fed starts worrying about how it is perceived in doing its job as opposed to actually doing its job, it tends to make grievous errors. It starts casting one eye on the mirror instead of having both eyes on the ball. It tends to miss obvious signs of problems when it just focuses on inflation and its perception. We have said it before, the market doesn't care how stately the Fed looks; it cares about the results. Thus the financial markets responded favorably when the Fed paused despite perceived higher inflation. It was the right thing to do.

In an ironic twist for those complaining about the job market, the Fed noted labor shortages pushing up wages. Geez. The economy was trying desperately to generate some jobs all during the expansion according to many pundits, and with job creation at 130K per month it hardly seems to be draining the workforce. Could it be the Fed is looking at the unemployment rate, i.e. the household survey that it discredited during the Greenspan years? Talk about losing credibility. You find yourself saying 'there they go again' as they switch positions based on what they want to say. Jobless claims near 300K were bane to the Greenspan Fed but were no big deal in this recovery. All of the sudden we get labor shortages out of modest monthly jobs growth? As with the Greenspan, this Fed now appears to be looking for excuses. Again, that is a bad sign and rather idiotic for a Fed saying it is concerned about its credibility. How Greenspan-like. How disconcerting.

Looking at the whole release you get the feeling the thing keeping the Fed at bay was declining energy costs. Prices overall had declined but not as fast as they wanted. If oil had not tanked along with gasoline they might have raised, at least based on what was in the minutes. We don't know what exactly Bernanke is saying or not saying. The talk certainly reminded us of the Greenspan days when the Fed would get impatient and not let its policy decisions work, or at least not give them time to work before moving again. This is a common theme in Fed action, and what often leads to the overreaching that many Fed members were concerned about in late 2005 and early 2006.

It is in rather sharp contrast to Bernanke's public appearances, his stated monetary policy theories, and indeed the comments made by Poole this week about following the financial markets. Perhaps the Fed is trying to maintain its ability to pause even as inflation remains above the comfort level. Talk a tough game and try to stick to the plan. The Fed is assuming that people will think it is a slacker if it is not tough. Why not voice the plans, i.e. say that forward inflation gauges show inflation peaked and they are just letting things work through the system? That is what the Fed is doing with this pause, but with the PCE and CPI rising, it fears it will be viewed as weak. It apparently does not want to abandon the PCE and CPI as their main indicators, at least publicly.

Bond market retrenches some on FOMC minutes hawkish tone.

The bond market sold on the news as interest rates jumped (4.85% 2 year versus 4.78% 10 year) and the inversion widened to 7 points. Modest still, but also close to becoming the entrenched inversion where size does not matter (where have we heard that before?).

The hawkish tone forced the bond market to retrace some of its rate cut gains. Some of the Fed-speak turned a bit mellow this week (Yellen, Bernanke), so the hawkish minutes tone might be overdone a bit, but the bond market still gave back gains when the report issued.

The bond market did get ahead of the Fed based on history. After the Fed pauses it takes on average 7 months to start cutting rates. It paused in August, so that would make it early 2007 (February) before the Fed would cut. In 2000 the Fed hiked last in May and then cut rates at the start of January 2001; seven months. This is the 'usual' case because the Fed goes too far with its cuts as it tries to get inflation to fall faster as Lacker wants and others echoed in the FOMC minutes. It is absurd to think that rate cuts in August would get inflation to fall faster in October, but that simply underscores the usual Fed SOP, i.e. where it gets impatient and loses sight of history and its game plan. It continues to hike and typically increases the intensity. By that time, however, it is way too late to stop the slowdown. Thus Lacker, new to the Fed, is showing he is an amateur because he wants to see inflation falling before stopping hiking. Again, that would ensure a major economic slowdown. Just open the history books and check it out. When you are finished, highlight it and send it to the FOMC members.



VIX: 11.62; +0.1
VXN: 18.51; -0.35
VXO: 11.08; +0.22

Put/Call Ratio (CBOE): 0.92; +0.09

Bulls versus Bears:

Bulls: 49.5%. Big jump from 47.4% where it paused for 2 weeks. Up from 42.1% and drawing closer to the 55% level considered bearish. Still below the peaks from January and April, and well below the 55% level considered bearish, but it is heading that way and getting too high.

Bears: 33.3%. Down from 33.7% where they held for 2 weeks as well. Down from 35.4% before that, but still well above the 20% level considered bearish. The 37.1% hit in July was the highest level in this entire cycle, easily clearing the 34.4% hit in late June back when bulls and bears kissed, just missing a crossover. Hit a new post-2002 high in that late June move, eclipsing the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005).


Stats: -7.16 points (-0.31%) to close at 2308.27
Volume: 2.042B (+14.31%). Volume moved up sharply, rising above average once again after a low volume ascent by the index following last Wednesdays breakout. Not a great power move higher. Then a big doji Wednesday on sharply higher volume. Definitely some churn as NASDAQ bumps at the top of the Q1 range. Going to keep a close watch on this as the move progresses.

Up Volume: 840.059M (-79.291M)
Down Volume: 1.063B (+322.859M)

A/D and Hi/Lo: Decliners led 1.47 to 1
Previous Session: Advancers led 1.1 to 1

New Highs: 64 (-25)
New Lows: 19 (+3)

The Chart: http://www.investmenthouse.com/cd/^ixic.html

NASDAQ rallied toward the top of its Q1 range once more (2333, 2322 on the Wednesday high), but again it faded back. It was positive with a solid move higher up to the Lacker comments and then ran into the Fed and airplane trouble. The higher volume and doji on the candlestick chart indicate some higher volume turnover; investors were passing the stocks around in a game of hot potato. No crash yet, but worth watching. The breakout was strong and the chips will be strong again Thursday. We would like to see them spark a rally and continue NASDAQ's breakout move, this time showing some power similar to that on the breakout move.

SOX (+1.29%) put on a good performance though it closed well off its high, giving back half of its gains on the session. It has made a strong move one session each week the past month but has been unable to follow it up with another move. It looked as if it would put it together early after the close with the earnings out from LRCX igniting the chip equipment sector. Then LRCX said some quite negative things about the future of chip equipment such as flat orders for 'several quarters', and that stuck a pin in the move and likely any second day of a chip rally.


Stats: -3.47 points (-0.26%) to close at 1349.95
NYSE Volume: 1.591B (+5.98%). Volume moved up to average as well on the NYSE as it bumped into the recent resistance, tested, and rebounded. A bit of churn here as with NASDAQ.

Up Volume: 663.541M (-249.342M)
Down Volume: 909.513M (+372.153M)

A/D and Hi/Lo: Decliners led 1.46 to 1. Middle of the road but stronger than the price declines indicate.
Previous Session: Advancers led 1.21 to 1

New Highs: 106 (-4)
New Lows: 5 (+3)

The Chart: http://investmenthouse.com/cd/^gspc.html

SP500 tried 1355ish once more and could not punch through, the same level it has bumped the past 5 sessions. Wednesday it tapped the 10 day EMA (1345) on the low and rebounded for a modest loss. The rising, above average volume indicates some churn setting in here as it tries to work higher but struggles. That shows shares changing hands faster, and that indicates the move is starting to get a bit winded as the buyers cannot push stocks higher and the higher volume allows the early money to exit while some late comers spend. It is still tired and in the fourth bounce after the breakout, so the easier move is lower for it from here to test again.

SP600 (-0.39%) gave back some ground but held up well, tapping the 10 day EMA (376.73) on the low and snapping back. It is holding above the September highs and is still solid in its base. Likely won't see much impact form the SOX as it continues to work on the base. That remains a solid underpinning for the economy as long as it continues building the pattern.


Strikingly similar to SP500, DJ30 completed its fifth lateral session, holding a tight range as it refuses to give up its gains. That is a sign of strength in most cases, and there is no reason to doubt that here other than the move is getting long in the tooth. There was some churn here as well as volume moved up above average as it tapped the 10 day EMA (11,794) on the low and the rebounded to cut the losses. It still needs a test, but it certainly has not shown anything to suggest investors are selling out of the index.

Stats: -15.04 points (-0.13%) to close at 11852.13
Volume: 256M shares Wednesday versus 227M shares Tuesday. As with NYSE and NASDAQ, some churn as DJ30 works laterally after the strong run.

The chart: http://www.investmenthouse.com/cd/^dji.html


Stocks weathered the Fed once more as well as a plane crash in NYC, and the key areas of NASDAQ and SOX looked ready to lead in the early after hours results. The gains posted on the big results dissipated and turned to losses in the chip equipment makers when the guidance came out. Chips were set up well to rally and looking for a trigger. Instead they are getting a bullet, at least as far as the chip equipment makers are concerned. It is hard to overlook them and write it off as sector specific. Other chip areas were not under heavy fire after hours, but for a sector looking for a trigger, this was an anchor.

We will have to see how the guidance impacts the rest of tech and semiconductors, but we are not expecting it to provide any boost. It is another issue the market has to deal with as the NYSE indices try to rest after strong moves while NASDAQ and SOX try to makes some strong moves themselves. Looks as if the money won't be rotating their way Thursday.

This may be the lead-in to the October dip we have written about; it is certainly not a reason to run out and buy in technology, but we will have to see what spin the market puts on the news. It is hard to see it as a positive at this juncture. Again, with SP500 and DJ30 in their fourth bounce post-breakout, they are ready for a test to set up a move to the end of the year. There was some churn Wednesday, and we will have to watch volume Thursday to see if it runs higher again. It was pretty strong Wednesday, and higher trade would certainly indicate conviction in the direction the market takes.

Support and Resistance

NASDAQ: Closed at 2308.27
2316 from interim tops in January and March 2006 trading range
2333 is the top of the Q1 2006 trading range (the January and mid-March 2006 highs)
2376 is the April high, the post-2002 high

The 10 day EMA at 2288
2273 is the recent September peak
The 10 day EMA at 2267
2250 is the March 2006 closing low.
2234 is the June 2006 peak (intraday)
The 200 day SMA at 2224
2222 is the August 2004/April 2005 up trendline
The 50 day EMA at 2213
2190 is the July 2006 high
2185 to 2182 is the September 2005 peak and interim high from November 2005.
2177 is the December 2004 high.
2168 is the August intraday high.
2158 from the May 2005 low.
2100 from the early and mid-2005 peaks

S&P 500: Closed at 1349.95
1358 to 1362 mark a series of peaks from April 1999 to August 1999 high and the February 2002 low at 1360.
1371 to 1373 is the December 2000 peak and the January 2001 peak

The 10 day EMA at 1345
1339 is the late September closing high
The 18 day EMA at 1337
1334 is an October 1999 peak
1326.70 is the May 2006 high
1324 to 1329 from the October 2000 lows.
The 50 day EMA at 1314
1311 is the April closing high.
1302 the recent August highs
1294 is the January 2006 high and 1297.57 is the February 2006 high.
The early June high at 1288
The late January peak at 1285
The 200 day EMA at 1286
1280.37 is the recent July peak.

Dow: Closed at 11,852.13
Has broken free and now we just look at how far above its 50 and 200 day SMA it gets to gauge how overbought it is. It is 6.2% above the 200 day SMA so it has some room before it gets to the 10% level where it typically will start to falter.

The 10 day EMA at 11,794
11,750.28 is the prior all-time high
11,723 is the January 2000 closing high
The 18 day EMA at 11,718
11,670 is the May intraday high
11,642 is the May 2006 closing high
The 50 day EMA at 11,510
11,488 is the early September high.
11,401 from the September 2000 peak and April 2001 highs
11,384 is the August intraday high.
11,350 from the May 2001 peak
The March 2006 highs at 11,329 to 11,335
11,279 is the late May closing high
11,243 is the early August peak closing high.
11,228 is the July closing high.
The 200 day SMA at 11,174

Economic Calendar

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

October 10
Wholesale inventories, August (10:00): 1.1% actual versus 0.6% expected, 0.9% prior

October 11
FOMC minutes, September 20 (2:00): Worried about looking like girly men as inflation is above their comfort zone as measured by CPI and PCE yet they are pausing.

October 12
Initial jobless claims (8:30): 312K expected, 302K prior
Trade balance, August (8:30): -$66.5B expected, -$68.0B prior
Crude oil inventories (10:30): +3.35M prior
Fed Beige Book (2:00)

October 13
Retail sales, September (8:30): 0.2% expected, 0.2% prior
Retail sales ex-autos (8:30): 0.0% expected, 0.2% prior
Michigan sentiment, Oct. Prelim (9:45): 86.5 expected, 85.4 prior
Business inventories, August (10:00): 0.5% expected, 0.6% prior

By: Jon Johnson, Editor

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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