Spending Rises on Clunkers

SUMMARY:
- Market ends the week flat line but does so by giving up a Friday gap higher.
- Techs try to lead but cannot while metals, energy remain solid.
- Personal income flat, spending rises on clunkers.
- Michigan sentiment decent, needs improvement.
- Cash for big companies laying off workers.
- Friday action and tired techs make Monday more interesting.

Flat close but a gap and reversal on some volume.

MRVL and DELL, two strong companies in technology, had the futures pretty ginned up on Friday. They came out with better than expected earnings Thursday night and had positive guidance and good things to say about a technology upgrade cycle to come. Futures were up and looking strong. Personal income and spending came out, and they were, at best, in line with a little bit lower number on the income which knocked the futures back a bit but did not destroy things. INTC came out and it had positive things to say about its sales in the quarter. That helped rev the futures back up for what was going to be a strong open.

As expected, the techs were in front. With that kind of news out, you would expect they would make a move. They have been lagging up to this point, sure, they are up to new post-March highs with the other indices, but they have somewhat abdicated the leadership role other the past couple of weeks. They had a perfect opportunity on Friday to reestablish themselves. The red carpet was rolled out, and they gapped higher and were looking strong as was expected. Indeed, there was also energy and the metals stocks. Industrial metals such as steel were also performing well. That was anticipated as well because they had some good looking patterns, indeed much better than the tech patterns overall, and we were looking to them to be a market leader - maybe not today but down the road when other things falter.

Speaking of faltering, the techs did that. The zenith for the move of the day was at the open. After that, the sellers came in and the market started to fall back. Again, this was somewhat expected to happen. The tech patterns were not strong enough to support a sustained breakout here. After they opened higher we were taking some gain off of the table and using that bounce to do it, then they started to peel back; indeed, they were negative by mid-morning and through lunch. They started building up in the afternoon session after lunch, and they made it to positive, but then there was a late half hour sell back that pushed the indices to mixed. NASDAQ gained all of a whopping point, while the Dow lost 37+ and the SP500 closed modestly lower as well. The SOX closed up 2% which you would expect given the good news from MRVL and INTC. They helped get the sector excited. As you can see when you look at the charts, of some of the big name semiconductors had a good start with a gap higher, they rallied from there, but then were pulling back by the end of the day. We had a bunch of gaps to dojis, and that may or may not mean anything. Sometimes a stock or index will gap to a doji, and then gap back the other way the next day creating something of an evening star with a maybe an island reversal. That can lead to more downside. We'll have to see how that plays out, but basically it was as expected on the day. A strong gap open led by the techs, but they did not have the stomach (or Viagra, as one person in the office said today) to keep it up for the entire session. It was not a total collapse, but we were not dealing from a position of strength when you looked how things played out and closed at the end of the day.

I also felt that while there would be a reversal and that perhaps the market would not fully tip its hand as to what it was going to do, and that was somewhat of the case. If you look at what happened on the day, they did move higher and they did sell back at the end of the session, but they are still holding the breakout from expiration Friday (two Fridays back) when they gapped higher and spent the entire week moving laterally in a very tight closing range. Maybe the intraday range was not as tight, but the closing range is almost a flat line. They did not change much of anything when you look at that perspective. What you did see on Friday was the gap higher and then the reversal. Some of the other days like Thursday we saw a sell down and then it rebounded, and that was different from earlier in the week when the market moved higher and then gave back its gains on the high (although it still did close positive on those days). On balance looking back at the week, it held the gains, and they were up from the week, but the problem was earlier in the week they gave back a good chunk of gains. It is like in baseball when a lot of runners are left on base. Maybe you score a run per inning, but you leave the bases loaded for several innings, and those are wasted opportunities. That is what we saw in the beginning of the week when a lot of points were gained but then lost. On Thursday it looked like we were in a recovery mode with that reversal only to see a gap and then a give back on Friday, thanks to the news and poor patterns in tech. It was not the strongest action if you look at the intraday picture over the entire week, although it is hard to argue with the result by the bell on Friday since the indices held their gains. You can bad mouth it all you want, you can say what you want about intraday reversals and higher volume selling, but they held their gains for the week and held that breakout to the new post-March highs.

Despite that, you always have to look at what happened at the end of the week. You are always saying "what have you done for me lately?" or in the market's case, "What have to done TO me lately?" One of the key takeaways on Friday was the fact that there was very good news. This is the kind of stuff that was not shown in the earnings season, i.e., companies saying "Things look good." Whole Foods has done it, DELL, and MRVL have done it. There are others who are starting to come out after this last earnings round and say that things are looking better, but it was not enough on Friday to hold some serious gains. It could not do it. That tells you a lot about the kind of sentiment that was out there among investors. The sellers tried to come back in and sell the market even on good news. It was Friday, so maybe that was not the whole picture - we will see more of it next week. You always get a better read on what is happening on the following Monday and Tuesday. Either it sticks and looks fine, or there is a shift. The sellers on the buyers will use that to step in and make their move and try to make their positions known.

TECHNICAL

Intraday was the gap higher on the strong earnings led by techs and we also had good moves by a bunch of the metals, industrials, and energy. They did not surge, they did not hold great gains, but they held nice patterns and that was a key. Even during the selling on the day, those leaders went back as well but did not selloff. They just held flat, and when the market came back late, they moved up to good position again and it did not bother them when the market frittered away at the end. There was the gap, the selloff and the recovery, and then just drifting off into the end of the day. That is not terrible action, but the indices never came close to recovering the early morning high. The sellers sold it off at that point, and while the buyers tried to come back in, they never had the kind of strength they had at the open. To me that is a much more telling picture of the intraday action.

INTERNALS.

The breadth was pretty much flat as one would expect, although on NASDAQ it jumped up on 1.8:1, thanks to the 2% gain in the semiconductors. They had a great session led by MRVL and INTC, so they posted solid gains and were not kicked back as much as the rest of the market when the selling got under way.

CHARTS.

Volume is the key once more, and it was interesting all week. It was up Thursday as the market sold off and then reversed. I heralded that as a positive, and it always is when the market sells off and then buyers rally back on stronger volume. That shows they are coming in with some, well, volume. Friday was the opposite story, the market gaped higher and sold off and it was on even higher volume. Both NASDAQ and the NYSE volume moved above average, up 9% on NASDAQ to 2.3B and up 8.2% on the NYSE to 1.4B. Both were above average, and that is very significant volume. Coupling that with the price action, you see there was a big rush in the morning and then it was drop kicked back down on higher volume. That is never a good sign when you see stocks trying to break to a new high, particularly when they are trying to break out of a previously four-day lateral move. There were four days of lateral movement on the close, they tried to make the breakout, but were drop kicked right back in. They did not break down, but they were not able to hold the move and sometimes it showed the sellers were a bit stronger. Sometimes this can portend a further move down in the coming sessions or the coming week because a lot of times when a market is tired you will see stocks try to make a break to a new high (and as you look at the techs you can see their patterns are tired because they have rallied along way). It looks like they are making a break only to immediately reverse. That happens on the bottom, too. It looks like a stock is breaking out of a range or breaking through key support and its goose is cooked, but then it reverses - maybe not that day, but on the next session it reverses and then rallies right back up. Had a little shake out there, hit a key point - if it was at a key support point, you always have to watch that because you can get a reversal. Here we have the indices on a new high following the March rally; they rose up and then reversed back. You can see that turn back on you and turn what looked to be a positive into a negative and a selloff. That is what you have to watch when you see these kinds of moves.

There are still positives here. The indices are all still in uptrends, no question about that. This is not really a threat to them at this point (at least not to the uptrends), a there is still a world of liquidity out there - literally a world of liquidity. There are funds here in the US with pockets and briefcases full of money waiting to be put into the market. The money is not loaned and needs to go somewhere, so it is going in the market. This is not a serious threat to the market yet. Sure it rallied up and turned over, but it is still in the same lateral move it was in before the day. It did not break down. It reversed and sold off, but the indices closed flat on the day. There was not any huge break down. Friday was not a major change of character, but it was an indication that NASDAQ is still very tired and it could reverse, but it was not a reversal in and of itself.

LEADERSHIP.

The techs tried. They had a red carpet rolled out for them, and they could have been leaders once again, but then they decided they could not hold the gain. Some of them did hold gains; some of the chips gapped up and managed to hold their moves for the day, but they were also well off of the highs. Many of them were showing those gaps to dojis, and we have to watch how those play out next week.

Always keep a list of gapping stocks on your watch lists. Keep them around whether they gapped up on good news, down on bad news, or just gapped for no apparent reason at all. If they go through a key area, they often continue on in the direction of the gap, whether it is up or down. Keep an eye on them. They can gap up and then reverse and gap right back down, and that can give you a play as well. It is always worth keeping an eye on gaps because if they fill or whatever they do down the road, you may not play them for two or three weeks, you may have to let the play form up and then when it is ready you move in. You can get some nice trades whether it is a gap fill and then rebound the other way, or if it is a continuation of a breakaway type of gap.

We saw the tech retire and we saw techs such as AMZN break below the 50 day EMA. We picked up a little of that just in case. If there is a reversal, the big techs are tired, but AMZN has been a good one - kind of a portent for what is going on. We saw BRCM gap higher, and it gapped up to a doji and may give us a downside play yet. We will see if it sets up, but we are not going to jump into it any time soon.

Software was interesting because it had been leading quite nicely. I was looking at some of the plays, but it had a tough day on Friday. There was good news in the techs in general, but software lost some money. Some stocks sold off sharply in price and on volume. We have to watch that because they were an emerging leadership group in technology, and it looked like they may be able to give technology a new breath of life, yet they got shot right in the solar plexus on Friday and they are wheezing. That may hurt NASDAQ next week.

As for the good, the industrial metals were quite solid, and gold was up as well. Gold may be trying to make a price breakout. It is not as high as it was a few months back, but it has been bumping into the $955 level and struggling. On Friday, it closed above that level at $957.20, up $9.20. It has been banging around that $955, so it is not a clean break by any stretch, but it did gap higher, and it could make a breakout and try to make a run back to $1,000. Other metals look solid; they are in great patterns and look like they could break up as well, hence that bit of Reliant Steel we picked up. That was a good buy, and I will be looking for those kinds of buys in the next week as well because their patterns are still very solid. They did not reverse back on the day as did techs and some other stocks.

Retail has been a leader of late, but it took the day off of Friday. It has put in its work, and it was time to take a tax-free holiday. There were no major losses there, there was just a pullback. We could use some good pullback for about three days in retail because it would give us some better buys on some stocks that have made good moves and then form little flag patterns (that 1, 2, 3, 4 pullback that we can use to move in).
There is still plenty of leadership out there, but a lot of it is tired. Retail is kind of tired right now, and it has had a good run. Tech is obviously tired, but maybe it will pull something out of the hat and continue higher. Sometimes indices and sectors just do that no matter what you think or how bad they look - they just continue to run. I do not think that will happen, but we will see. Leadership was tired, but there is a new group of leadership coming up in the metals and in energy that has had a nice base going for the last 8-12 weeks. These stocks have chopped around while some of the other sectors moved higher, and they are getting set up nicely. That is good because it is kind of an inflation play.

There may not be inflation tomorrow or next month or the next quarter, but something must change with respect to all of the liquidity in the world. It is not being used, and we have more money chasing the same amount of goods because we are not getting ramp up in inventories right now. Business inventories are falling, and maybe that will reverse. Maybe they will start going through the roof, but the problem is that the textbook definition of inflation is more money chasing the same or fewer number of goods. Right now we have the same or fewer number of goods; there is no doubt about that with the contraction in wholesale and business inventories. The question is whether that will lead to immediate inflation, or if there will be a burst of supply development that is going to alleviate this problem and put the money to work and create more supply. We will see if that is the case, but that is a very strong reason that we are seeing metals move higher, along with improvement in the European economy.

China has been buying, but has not been buying anymore for economic advancement, it is buying to hoard and stockpile. It is going to slow down its buying, and that will not keep the pressure on the prices. What keeps pressure on the prices is real demand and inflation. These are hedges. These are hard assets that people want to hold in times of inflation because, as we all know, paper currency are not a good store of value in times of inflation.

THE ECONOMY

Michigan sentiment improving.

This week was another week of better economic data. We saw the confidence improve in Europe, and in the United States. We saw the manufacturing continue to improve in Europe and we saw some regional manufacturing results turn positive here in the US last week. Home inventories were down, new home and existing home sales were up. There was improved confidence and sentiment in the US, even though Michigan Sentiment was not great on Friday. It came in at 65.7 which beat expectations of 64, but it was less than the previous iteration that was at 66.0. It was not a blowout sentiment number, just as the conference board's improvement in their consumer confidence number early last week was not that great either. It is still at recession levels and not showing a major upturn in confidence, but it is showing a turn - something that we have not had for many, many quarters. With a little improvement in confidence, maybe it can get the ball rolling along with these other indications that we are seeing.

Spending juiced by cash for clunkers.

One of the big reports out on Friday was personal spending and income. Incomes were actually flat instead of the 0.1% gain expected, but that was much better than the -1.1% in June that was revised from -1.3% originally. A better revision is always a positive, but it was not that much of a positive in this case. Spending was as expected, up 0.2%, and in June it was revised higher to 0.6% from 0.4%. Why did we have this bump? Everyone is saying it was the "cash for clunkers" where the government decided it would help the car dealerships and give everybody money to turn in their cars and get new ones. It is a great plan if you want to sell cars, but you have to really want a car because it is an incentive to you to get $4,500 cash back, but you might have to buy a $25-40K car. That means taking on extra debt unless you have your car paid off but, gosh, who does that anymore, right? Just most people who have common sense. Getting a car probably means getting a new extended loan or debt obligation out there, so you really need a good reason, like your current car truly is a clunker. I know some people who did turn theirs in and, believe me, they were clunkers. It is good to have them off of the road.

The government now wants to push an appliance deal; they want to give people rebates or cash back to go and buy appliances. There are no details out yet whether it is a stove, oven, dishwasher or that sort of thing that you have to buy. I guess we will see "cash for junk boxes" or what have you, and I guess that is fine. The problem that I have with this is that the government is picking which sectors win and lose. It is always better when the government says it will give a credit for buying assets for your business or buying assets that you can use in your home. It is better when it does not try to pick and choose the winners, but when it just says they want to get production up everywhere, to get supply and demand going. Let the consumer decide where the money should go. Let the market decide and the market will push the money to where it is most needed and its most efficient use. It is bad news when the government picks the winners and losers. That is the kind of structured, organized government that we have seen fail throughout history, and why we would want to emulate that is beyond me.

Who makes the jobs in the US?

Case in point, Whirlpool announced on Friday that it is closing a plant in Illinois and is going to lay off 1100 workers. Its stock price is going up because there is some anticipation of economic recovery, but also because it has been cutting costs like crazy and bleeding jobs accordingly. It is just the same as all major companies, whether it is GE or GM or any of them. They are bleeding jobs and have been doing so for 15 years. They do not create jobs, so we do not need to be giving GE massive amounts of money for green initiatives that are going to save that company. They are in bed with the current administration and lobbying for these green initiatives that they will make money off of, yet GE has not created any jobs in 15 years. It has had net losses of jobs. The government's own statistics show that over 75% of all new jobs come from what are designated as small businesses with 500 employees or less. That includes mom and pop, that includes me, and that includes a lot of you that are seeing this. We create most of the jobs, so why would we want to have programs that are targeted to companies that are not creating jobs? The administration says is its primary concern is creating jobs, but that is not the case. If they truly do want to create jobs, why give money to companies that will be laying employees off even as they get the benefits of these programs? Think about that and talk to your Senators and House representatives and ask them about the logic of that. There is an incongruity with what we hear out of Washington and what actually happens, between who is being helped and who actually creates the jobs. You can see the disconnect here. Washington has it backwards. We have reverse incentives for those who actually make the economy work, and that is one of the reasons I am concerned that we will have a hard time seriously recovering.

We are having economic improvement, but it is just a matter of how strong will it be. Eventually the economy has to balance with trillions of dollars circulating through it and that is what we are seeing. There has also been the readjustment with worry about another Great Depression where the economy just shuts down completely, but now prices have adjusted back and the economy is starting to work again. That means you are naturally and necessarily going to have an improvement in the economic numbers, but the question is if it will be a boom or if we will just skate by with 1% GDP growth. Top estimates are at 2.2% for next year. That is terrible. That is not even at European standards really. Is the stimulus working? We will have to see what results we will get over the next year. Maybe it will, but odds are (and history says) that it will not be that strong of a recovery.


THE MARKET

MARKET SENTIMENT

VIX: 24.76; +0.08
VXN: 24.93; -0.08
VXO: 23.61; +0.22

Put/Call Ratio (CBOE): 0.76; -0.06

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 doesn't have the cash to drive it higher.

Bulls: 48.3% down from 49.4%. This follows a steady rise past the 35% level that is the threshold for what is considered a bullish climate. It does not mean things are bearish; that takes a reading in the 60% range. Hit a high of 47.7% mid-June on the run from the March lows. Again, to be seriously bearish it needs to get up to the 60% to 65% level. Dramatic rise from 21.3% in November 2008, the bottom on this leg. This last leg down showed us the largest single week drop we have ever seen, falling from 33.7% to 25.3%. Hit 40.7% on the high during the rally off the July 2008 lows. 30.9% was the March low. In March the indicator did its job with the dive below 35% and the crossover with the bears. A move into the lower 40's is a decline of significance. A move to 35% is a bullish indicator.

Bears: 23.1% up from 21.3%. Rebounding some from the big drop two weeks back from 31.1% and 35.6% the prior week. Still a massive exodus from the ranks of bears. For reference, cracking above the 35% threshold considered bullish. Hit a high on this run at 47.2%. 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: +1.04 points (+0.05%) to close at 2028.77
Volume: 2.315B (+9.42%)

Up Volume: 1.596B (+296.593M)
Down Volume: 729.483M (-62.044M)

A/D and Hi/Lo: Decliners led 1.82 to 1
Previous Session: Decliners led 1.07 to 1

New Highs: 79 (+28)
New Lows: 12 (+3)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg


SP500/NYSE

Stats: -2.05 points (-0.2%) to close at 1028.93
NYSE Volume: 1.392B (+8.26%)

Up Volume: 890.386M (+25.865M)
Down Volume: 484.688M (+85.288M)

A/D and Hi/Lo: Advancers led 1.06 to 1
Previous Session: Advancers led 1.2 to 1

New Highs: 106 (+10)
New Lows: 66 (+30)

SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg

SP600 CHART: http://investmenthouse.com/ihmedia/SP600.jpeg


DJ30

Stats: -36.43 points (-0.38%) to close at 9544.2
Volume DJ30: 205M shares Friday versus 163M shares Thursday.

DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg


MONDAY

Lots of data to come and a technical picture to resolve.

There is going to be a lot happening in the coming week, and it will be a data week as well as a technical week. We are going to see the Chicago PMI and the national ISM - this is the one people have been waiting for. We have seen Europe turn positive, and we have seen some of the regions turn positive. Can the nationwide number on the US pop over 50? Expectations are right now that it is going to be 50.2 versus 48.9 in July. The bar is set and we will see if it can jump over it. There is also the ADP, the employment report, and you know what that means for Friday. We have the FOMC minutes coming out, and we get to see just where the Fed is with respect to withdrawing any stimulus. That has been a hot topic, if not this week than the week before. Of course there is the jobs report on Friday. -225 nonfarm jobs expected. That is terrible, but it is an improvement.

We have a market that was flat for the entire week. It went up, then moved flat for the rest of the week. There was a gap on expiration Friday, holding at post-March highs, but the market could not push it when there was good news on Friday. Maybe that was just a Friday in the summer and no gain would hold anyway. You have to go back to the fact that volume was higher, though. It moved above average on both of the major exchanges, so it was not a fact that there was no one trading and no one ready to buy - they were there and ready to buy and they gapped them higher, but then they got sold back on more volume. It was not your average Friday in the summer that was just languid and slipped into the weekend to imbibe some alcoholic beverages. That was not the case.

That makes next week another interesting week, as the Chinese would say. This could have been an inflection point this last week. We had the gap higher on expiration and it did nothing with it. The market deferred the next major move until the following week. We will see what happens this coming week. The fact that the market rallied, gapped on Friday and reversed makes it somewhat more interesting and indicates to me that there could be a decision made this week about where the market is going to go in the near term. While I see a lot of tired patterns in NASDAQ, the big cap techs, one thing had been a constant in this market and that is that every time the sellers have tried to sell it, the money has come in and refused to let them take the market down. Indeed, when it has gone down, the money has come in and driven the indices back up.

When a company that has reported great earnings and has always beat and has been on a great run for several quarters or two or three years - what happens when they finally do not beat? It is either already been built into the stock or they get crushed if expectations are that they will beat. If the market does not make a rebound, if it sells off and the money does not bounce it back up, then that will be a very important move. Thus far it has done it. Two Mondays ago, it gapped lower and did not come back that session. That looked pretty grim, but it rebounded after that. It is not always the first session that happens, it is what leads up to it and then how the buyers come back in after the selloff. Remember, we are in a world full of money now, and it is the buyers' to lose. If they do not want to come in and back up to truck and pick up stocks on any dip, we will all see that happen. These tired patterns on NASDAQ are giving a hint of saying that something could be up because they had cruddy patterns, gapped on Friday, and could not hold it even though it had good news. They are trying to tell us something and we will watch what happens and see if the sellers come in and can keep the market down, or if the buyers just back off for now and want to wait until prices get a bit better. That is why we took some downside positions.

Our SPY and SMAs are kind of beating us up around the head and shoulders, but they were somewhat of a hedge anyway against these patterns that were developing, and our upside that we have, and if they roll down we will be fine on those. We also took a few others that are in good shape, and if the market sells back we will make good money on those. If the market sells back enough, we have a lot of stocks that we have gain built into - we will just let the market take us out on those and go home with the rest of our gain. We took some gain on the early gap higher on Friday figuring it would roll back over. We have our stocks in good positions, we have taken good position as far as the risk/reward. If the play does not work out and turns down, we can get out of it without any major losses and protect a lot of the money that we have made on the way up. If it sells down, then we make money as it comes back. I will also be looking to the upside with those energy and metals stocks and a few others that I will be looking at this weekend. If they decide to lead and if the money stays around and comes back in, those stocks that are the next wave and have set up good bases are going to be the leaders. NASDAQ stocks are tired and are going to fade even if the market continues higher. They may follow along, but they will not be blazing higher and leading the way. That will be up to these others that look quite solid and we will be dealing with them and buying into them as they make their breakouts. As I said, we took some gain in them on Friday.

We have our plan laid out there. We have tech that is tired and reversed. We have retail which has been a leader, but it took a day off and we will see if it gets worse or just takes a breather and comes back. We have some great stocks in energy and metals and industrials that continue to perform well and look ready to break out if the money is going to stay in the market and send it higher. More of the same story - we are still seeing whether we can hold these highs, but thus far the money has won the day. Have a great weekend, and I will see you on Monday.


Support and Resistance

NASDAQ: Closed at 2028.77
Resistance:
2070 is the September 2008 intraday low
2099 is the mid-September 2008 closing low
2169 is the March 2008 double bottom low

Support:
2016 is the August peak
The 18 day EMA at 1994
1984 from late September
1962 is the bottom of the August 2009 range.
1947 is the October gap down point
The 50 day EMA at 1926
1897 is the October post gap intraday high.
1880 is the June peak
1862 is the July peak
1786 is the November intraday high
1780 is the November 2008 closing peak
1773 is the May intraday peak
1770 is the mid-October interim peak
1673 is the prior April peak
1666 is the intraday January 2009 peak
1664 is the May 2008 low
1661 is the April 2009 prior peak
The 200 day SM A at 1660
The January closing peak at 1653 (intraday)


S&P 500: Closed at 1028.93
Resistance:
1044 is the October 2008 intraday high
1106 is the September 2008 low
1133 from a September 2008 intraday low
1185 from late September 2008
1200 from the July 2008 low

Support:
The August intraday peak at 1018
The 18 day EMA at 1009
The November 2008 peak at 1006 closing 1007.53 intraday
992 is the August 2009 consolidation low
The 50 day EMA at 973
956 is the June intraday peak
944 is the January 2009 high
935 is the January closing high
932 is the July peak
930 is the May peak
919 is the early December peak is bending
899 is the early October closing low
896 is the late November 2008 peak
888.70 is the April intraday high.
882 is the early May low
The 200 day SMA at 879
878 is the late January 2009 peak
The prior April peak at 876
866 is the second October 2008 low
857 is the December consolidation low


Dow: Closed at 9544.20
Resistance:
9625 is the October 2008 closing high
10,365 is the late September low

Support:
9387 is the mid-October peak
The 18 day EMA at 9367
9116 is the August low
9088 is the January 2009 peak
The 50 day EMA at 9039
8985 is the closing low in the mid-2003 consolidation
8934 is the December closing high
8878 is the June peak
8829 is the late November 2008 peak
8626 from December 2002
8588 is the May high
8581 is the July peak
8521 is an interim high in March 2003 after the March 2003 low
8451 is the early October closing low
8419 is the late December closing low in that consolidation
8375 is the late January 2009 interim peak
The 200 day SMA at 8329
8315 is the February 2009 peak
8307 is the April 2009 intraday high
8221 is the May 2008 low


Economic Calendar

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

August 31 - Monday
Chicago PMI, August (09:45): 47.2 expected, 43.4 prior

September 01 - Tuesday
Construction Spendin, July (10:00): -0.2% expected, 0.3% prior
ISM Index, August (10:00): 50.2 expected, 48.9 prior
Auto Sales, August (14:00): 4.2M prior
Truck Sales, August (14:00): 4.2M prior

September 02 - Wednesday
ADP Employment Chang, (08:15): -246K expected, -371K prior
Productivity-Rev., Q2 (08:30): 6.1% expected, 6.4% prior
Factory Orders, July (10:00): 1.5% expected, 0.4% prior
Crude Inventories, 08/28 (10:30): +128K prior
FOMC Minutes, August. 12 (14:00)

September 03 - Thursday
Initial Claims, 08/29 (08:30): 570K expected, 570K prior
ISM Services, August (10:00): 48.0 expected, 46.4 prior

September 04 - Friday
Average Workweek, August (08:30): 33.1 expected, 33.1 prior
Hourly Earnings, August (08:30): 0.1% expected, 0.2% prior
Nonfarm Payrolls, August (08:30): -225K expected, -247K prior
Unemployment Rate, August (08:30): 9.5% expected, 9.4% prior

By: Jon Johnson, Editor
Copyright 2009 | All Rights Reserved

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

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