More Startling Economic Numbers

SUMMARY:

- Down end to a down week, but still in position to continue the rally. Just has to do it.
- Gold jumps off its 50 day EMA as the dollar bounces off its test.
- Retail starting to crack.
- More startling economic numbers.
- Trend remains in place, but after another week it is up to the buyers to prove they can maintain and extend it.


MARKET SUMMARY

Volatile expiration pushes indices to the 'show me' point.

It was not necessarily a great day for the stock market, but it was a rather typical expiration Friday. Stocks sold off, rebounded to flat, and then sold off in the last hour and a half to close to the downside. There were some steep losses. NASDAQ, -0.7%; SP500, -0.8%; Dow, -0.75%; SP600, -0.8%; SOX, -0.3%. NASDAQ 100, -0.8%. Overall a very spread-out, even decline as all market sectors took part in the general beating about the head and shoulders. It was by no means a bloodletting. It was something of a stubbed toe, but it was typical of an expiration Friday.

I want to note a couple of interesting features of the day. The initial selloff at the open was somewhat forecast by the futures. They were down but were trying to trend higher, and stocks did try to move up momentarily before they fell off down to the mid-morning low. There is the tumble, and then an inverted head and shoulders and a nice break to the upside. As a bookend to that, there was a head and shoulders form over lunch and into the early afternoon. It brought the indices right back down near the session lows by the close. Just a little intraday chart interpretation, and it very much reflects what you would see on a daily or weekly chart. In expiration, you have volatility and it sets up clearly-defined bullish and bearish patterns intraday that help the transfers from downside to upside and then back down again.

There was very little to get the market excited on the day. There were a few earnings out, mostly retail sales. GPS and ARO both had trouble. GPS had a problem with its outlook, and it seems that sellers love to sell GPS. It gapped down sharply from near 23 to 19. Very steep decline for this stock. ARO did not fare much better. It had already gapped lower, and there was a continuation gap and something of a breakaway as well. Huge gap to the downside. It was struggling because it had the same problem with its outlook. ANN actually surprised to the upside and posted some strong guidance. Nonetheless, it was down as well.

I noted on Friday, and as the week progressed, that some retailers are starting to struggle. More than that, some are actually cracking and starting to break. That somewhat makes sense when looking at the economic data over past several months. It has been steadily declining, and we saw that this past week as well. Housing starts and building permits were disappointing. Industrial production and capacity utilization both came in less than expected, showing declines after peaking. It looks like they are starting to turn back over.

Initial claims improved, but they are still over 400K for a sixth week. Again, this is no reversal. I will talk about some of the statistics shortly. These are not good numbers. Existing home sales were down when they were expected to rise. The Philly Fed was pathetic at 3.9 versus 18 expected and 18.5 in April. The leading economic indicators put in a downside month after eight months to the upside. That does not mean the trend has turned anymore than a 409K weekly jobless claims means that the six-week rise is over. It just shows that there is some mitigation in the numbers, and a weaker leading economic indicators number actually dovetails with the other weakening data we have seen through the economy.

As retail earnings start to fall, it corresponds to the issues with respect to the economy. Again, I will go into some of the numbers in more detail later. They are quite frightening with respect to how many people are unemployed and where we are with other recessions and depressions in the past. The RTH, the retail ETF, is having problems of its own. Nice, strong rally up through May, but now it is stumbling. We could have an ABCD pattern, so I am not jumping off the cliff with respect to retail. It is showing some cracks, though it is after a good run.

We will have to see how that shakes out, but I do see some big moves down. There are some almost unwarranted gaps to the downside. Again, I am referencing GPS and ARO. Those moves are not warranted for the numbers, and that is often a sign that a sector is running out of gas. People are getting out while the getting is good. We need to watch this for the other retail leaders to see if it becomes more of an epidemic or if it is just an isolated outbreak.


OTHER MARKETS

Dollar: 1.4115 versus 1.4312 Euro. We had the pullback from this sharp trend break that began in early May. The dollar spent the entire week testing, tapped the 20 day EMA on the Friday low (the low for this pullback), and reversed to post a strong upside gain. This is a classic test. The initial break, a little flag pattern, and now rallying back to the upside. The dollar is gaining strength, no doubt, to the chagrin of the Obama administration and to Chairman Bernanke. They are playing with our dollars and our wealth, in a gambit to benefit the federal government. It wants to help pay for its profligate spending while it decimates our wealth and savings. It is a game that has been played before. It is been played here and in other countries, and it does not have a good outcome for us.

The dollar is rebounding regardless of what the Fed Chairman and the President are trying to accomplish. One reason that it did bounce today versus the Euro was that Fitch downgraded the Greek economy and Greek debt once more. They basically said it is junk. Tell us something we did not know. Every time that happens, the dollar performs better versus the Euro. That was the lion's share of the gains for the greenback on Friday. Even with that reason for the day, overall in the past three weeks, we have a strong break to the upside.

The dollar has been tested now, and it looks like it has held because the dollar is starting to break back to the upside. I am all for that. We need to get things back on track with a strong economy and a strong dollar. We need to get away from this idea that we will be an exporting nation of large multinational companies. They will export their cash cow-products that make them money, but we will not have any real innovation ongoing. That would be devastating to our standard of living in the future.

We have to develop the new products. We cannot rely on GE, IP, and CAT to make big technology breakthroughs. It does not happen that way. Thomas Edison was the founder of GE, but it was a small company when he was making his inventions. Then it rode those to super-multinational status. We need the entrepreneurs and innovators to create the new technologies that require the new jobs and that raise our standard of living. Then we can export that technology elsewhere.

There is nothing wrong with it, but we cannot rely on exporting bulldozers as a way to maintain our lead on the rest of the world. Any country can make a bulldozer. I do not mean any offense to CAT, but if someone wants to make a bulldozer, they can do it. We have to make new technologies that create the new jobs that require that new class of worker. That makes us wealth. That is what has always made us so strong, and it is the small businesses that do it.

I am glad to see the dollar rally. The problem is, when the dollar rallies, what happens to the stock market? The relationship it has now is abnormal because most of the money is in the big-name companies. It sees the goal of the administration and the Fed, so it is moving into those stocks that will benefit from their actions. When the dollar is rising, it is contrary to the earnings of those companies. Thus the stock market falls because the stock market is playing the same game that the administration and the Fed are playing. Eventually that will change. Hopefully the dollar will just do it on its own. That would be great, but I do not see any reason for it to rally with these terrible economic numbers. Maybe we are just looking at an oversold bounce and nothing more. That would be sad, but at least it gives us a bit of buying power near term.

Looking back at the overall chart and the peak back in June of 2010, you can see it was due a relief bounce. It is also right back at the important resistance from the November 2010 low. Notice that it banged into it and fell back. It looks like it will try it again. It has the trend and it has formed an inverted head and shoulders that looks like it wants to make the break to the upside through this classic double bottom of October-November 2010.

We have a short-term indication that the dollar will continue to move higher. I view that as a total positive because it brings the price of oil down. That will help with the price of gasoline if refineries do not flood and we do not have to continue making 16 different blends across the country that are bottlenecking the refineries. But that is another story altogether. Of course, as always, I was digressing.

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Bonds: 3.15% versus 3.17% 10 year US Treasury. A nice rebound in bonds after they sold off midweek. There was a huge move up on Tuesday and a reversal, but they have held at the 20 day EMA and look to be bouncing back to the upside. We had this big trading range from back in 2009 and 2010. A very important support level hit back in June of 2009, again in January of 2010, February, and again in late March and early April of 2010. That led to a big surge in bonds, but they sold off. They also formed an inverted head and shoulders. A nice rounded bottom, and they are rallying off of that bottom. We have to keep asking what the heck bonds are rallying for. It could be many things.

Number one, our economy is not that good and is heading down. Bonds perform better when the economy is in trouble and stocks start to tail off. That makes sense. There other issues as well. The President is trying to throw Israel under the bus, and maybe the ramifications of that were something the bond market was worried about. Israel is left with no choice than to take care of things on its own if the US does not have its back. Israel will have to do what it feels is necessary against Iran. After that, our President will use that against Israel, beating them over the head with the horrible things they did. That is not a good outcome either.

We have taken away Israel's choices, and that is not a good thing to do. It puzzles me why it is being done, but it does not matter because it HAS been done. Maybe we will see some backtracking. Who knows? In any event, bonds remain skittish. That is why they are moving higher even when, based on our economy, they should be moving lower.

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Gold: $1,510.20, +17.80. Gold was one of the big stories of the day. It has been holding at its 50 day EMA after this big pullback, and on Friday it started to make an upside move. Looking at the Fibonacci chart, it was not necessarily a great, high-momentum pullback. It fell all the way to the 61% retracement, but it made a bounce and a higher low near the 50% retracement. As noted, it was holding right above the 50 day EMA. Look how it snapped off the bounces each time it tapped it. Then we have the nice break to the upside on Friday, and that was enough for me to issue a bonus alert for the IAU. It is another way to play gold, the COMEX gold ETF. It is priced a bit less, and it also has a little more favorable transaction costs.

In any event, a nice break to the upside on strong volume by gold, and it looks as if gold will continue higher. You would think it is because of the inflation issues, but then you have bonds moving higher. There are a lot of undercurrents in the economy and the world right now.

Is silver going to start back up? It might. It needs more work. The SLV, the silver ETF, simply does not have the same kind of nice pattern that gold does. It had more of a blow off top. It really went up higher. The last three or four months, it really outpaced gold to the upside. Thus it has outpaced it to the downside. It was a bit overdone and frothy. It is paying the price now. Nonetheless, a nice move by gold as it starts its way back up off its 50 day EMA.

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Oil: $100.12, +1.68. Oil started to come back on the session. It will not give in at the February consolidation and the March low. It sold off and it has tapped down. There are four sessions where it has reached lower and reversed each time it hit this certain level. There are buyers that keep popping it back up. It rallied on Friday at a critical point. It is bumping into the 10 day EMA that is falling down on top of it, and it has been pushing it back. It is not strong resistance. If it holds it shows that oil is weak. Oil looks like it has buyers underneath it. I think it might try to pop up higher. The 50 day EMA is logical. It is just a bit below the March peak. Two highs at that level, and then the April low is there as well. That will be some fairly significant resistance for oil as it continues to the upside near term.

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TECHNICAL SUMMARY

INTERNALS.

Put/Call Ratio. The Put/call ratio jumped over 1 on a relatively minor downside session. It closed at 1.04 after bumping up at 1.0 for quite some time. Anything above the 1.0 level typically marks excess bearishness because buyers and stock players are typically more bullish than bearish. It is a relatively rare occasion when there are more put buyers than there are call buyers. Looking at the indices, SP500 was down but hardly out. There is a lot of pessimism with respect to where the market is going near term. The pattern does not suggest anything nearly as nefarious as the put/call ratio jumping over 1.0.

That said, I have to put a caveat in here. It was expiration Friday, so there was probably more activity with respect to those puts. Maybe there was rolling out of positions. Maybe some puts were sold and the sellers needed to roll those out to the next expiration. That will bump the ratio higher. We need to watch this over the next week and see what happens.

It was not a one-day phenomenon. At noted, the put/call ratio only had to rise 0.07 to get to 1.04. That means it was at 0.98 right before that. It was bumping up against that level. There is pessimism even has the market has moved higher. What do we know about the put/call ratio? It is a contrary indicator. As it moves higher as people get more bearish and buy more puts the contrary is that things are not as bad as the crowd thinks they are. At least not as bad as the option traders think they are. They are a pretty fast crowd, those option-buy guys. They tend to have a lot of fast money and go in and out. They can get overexcited. That is the benefit of the put/call ratio.

Just one move over 1.0 is not in itself indicative of any kind of turn. What I am looking at is that the level has been elevated even as the stock market has moved higher and has set up a decent ABCD pattern. That would suggest there could be too much pessimism out there based on what the market is showing, and we might get another bounce to the upside.

Volume. Volume was up slightly to 1.8B on NASDAQ, but that is still a very low level. It was expiration, so you would expect a bit more trade. It was up 15% on NYSE, and it jumped up late. A lot of late trades bumped the volume up to 1B shares on the NYSE. That should push it over average on the day.

Breadth. Breadth was -2:1 decliners over advancers on the NASDAQ and -1.9:1 decliners over advancers on the NYSE. It was not a great day for stocks, but it was not a bloodletting either.


CHARTS

SP500. SP500 volume jumped up to just above average. The index fell back from the Tuesday reversal, the Wednesday rally, and the equivocal Thursday right at the February peak. It faded back from there and does not look that great. But it did not give the move up. It is still holding above the 50 day EMA, and it could still make the break higher. This is not an overly-negative pattern by any stretch, and it is still positive with higher highs and higher lows overall. The trend remains in place.

That said, the ball is in the buyers' court to make something happen. You had the breakout, the test, and then it tried to resume the move and could not hold it. Then it formed the ABCD, had the reversal where it should have, and rallied up. It looks like it wanted to break higher, but it has not been able to hold it yet. A test like this is normal. We will see if it holds above the 50 day EMA and can rebound and deliver that move up to the April peak. That is the initial target we have for the continuation run off of this ABCD pattern.

NASDAQ. NASDAQ showed similar action. It, too, closed above the 50 day EMA after coming back off of that Thursday doji. It has its own ABCD pattern. It has made its rally as well. It did not quite make it to the February peak before it faded back, but this is not a bad pullback. You had the break higher, it came back to test the 50 day EMA, and then this gap up point from mid April. If it holds here and can make the turn back up, that would be fine for a run up to that April peak. Again, that is our initial target on this rebound move attempt.

SP600. SP600 did not have a great day. It was off -0.77%, but it is trying to hold the 50 day EMA as well. It has a little narrowing pattern. We will see if it can make a break upside off of this pattern. It was very solid. It was making higher highs and higher lows. Then it made a lower high and a lower low. It is getting muddled. That would be the ABCD, so it is okay. It has to hold here. The ball is also in the buyers' court here to see if they can send the index back to the upside.

SP400. It is always fun to look at the mid-caps, and they are an important sector. Not a bad pattern, tapped at the 50 day EMA on the low and rebounded, cutting the losses on the session. It made a lower low as did the SP600, but it is still in that same general pattern. Still in position to make a move higher. Once again, it is in the buyers' court as to whether it makes the move or not.

SOX. SOX was down 0.3%. It is trying to hold some support. There is definite support at this 430 range. You can see some bottoms and gaps. There is a little island reversal where it gapped below it. There is an inverted head and shoulders and a gap above it. Then back in January of 2011, it held a low at that point as well. There is history here. It is trying to hold, and it would be a good point for it. If it does not, it indicates that the semiconductors will not participate. What would that mean? Semiconductors are very commoditized; they go into just about everything we buy now. If retailers are starting to struggle and if the economy is struggling as it looks to be, there may be fewer goods purchased. Then there would be less need for semiconductors, and then an oversupply. In oversupply the price declines, and then the stock prices decline as well.


LEADERSHIP

Technology. AAPL did not have a great turn of events as it rallied back from the selloff earlier in the week. It was unable to continue higher, reversing on rising volume. Not a good indication, but techs overall remain in good shape. BLKB has a nice pullback underway. What a reversal. It was a big one down to the 50 day EMA that reversed. It looks as if it had a shakeout and is ready to move back to the upside.

Same thing with TTWO. It is in multimedia graphic software. A nice pullback here. Looks like it is setting up a new move to the upside. CRM gapped sharply to the upside. It is performing quite well. You see the trend; software continues to perform well. FFIV had a pullback to end the week, but it still looks quite solid.

The PC-related aspects of technology are struggling. Earnings from HP and DELL showed that there was cannibalization of PC sales in favor of the touch pads and smart phones. Business software is doing fine, filling a demand as businesses try to find ways to save money.

Retail. Retail was a mixed bag. HIBB gapped to the upside on strong volume. It had good results. AMZN is struggling. It bounced on the week, trying to find its legs and continue. Looks like it might do it, but it has to prove it. LTD had a tough day. It is one that is starting to crack, but it is not a massive problem for that stock yet. ANF is moving up fine. YUM is moving straight on to the upside. EAT is still looking strong. Retail is broken into segments. Some of the more discretionary areas are taking the hits first.

Energy. Energy had a decent day. OII started to the upside. It announced a split and is trying to make a break higher. RRC is breaking upside on good volume in a nice triangle. Very solid action. Some of the natural gas producers are doing better. CHK bounced nicely off the bottom of its range, showing good volume. CVX does not look good. It has a double top, it has a lower MACD, and it is bumping up against the 50 day EMA. It looks like it might sell some to the downside. BTU is trying to hold the 200 day EMA and some other support levels. Trying to make a bounce at that level. There could be some bounces in energy coming up.

Industrial. CAT is not looking good. It rebounded to the 50 day EMA and looks to be rolling over. DE announced good earnings on the week, but it is continuing to sell off. Not very strong in that sector.

Financial. Financials are not helping at all. JPM turned back down after rallying early in the week. WFC is showing the same action, bouncing down from the 200 day EMA. Not looking that strong. It will make it much harder for the SP500 to make another break to the upside if it has those financials unwilling to participate or selling back instead.


THE ECONOMY

Unemployment, Money Supply, and Inflation numbers that are quite worrisome.

TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:

Flash: http://investmenthouse1.com/ihmedia/f/eco/eco.html


THE MARKET

VIX. VIX is hugging the same level it did back in December, January, and February. That suggests perhaps the market could sell, but, as we have seen, it has not materialized into anything. We are not seeing the volatility moving higher as the market moves higher. That would indicate something much more troublesome ahead. It is matching the market right now, so I am not getting too wrapped up in that and what volatility is showing.

VIX: 17.43; +1.91
VXN: 18.16; +1.1
VXO: 16.41; +1.12

Put/Call Ratio (CBOE): 1.04; +0.07

Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market, then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market does not have the cash to drive it higher.

Bulls: 45.6% versus 51.1%. Nice decline in bulls even as the indices continue to move near rally highs. This is exactly what you want to see: growing pessimism in the face of an uptrend and ABCD pattern. It is not definitive, but after high readings, this is good to see. Held at 54% for a few weeks before this slip. 60+ indicates some trouble for a bull run. Hit 55.1% in January and 58.8% on the December high on this leg. It is matching those readings in a string of high readings but below the 5 year high at 62.0. Fading back from the level considered bearish, i.e. where so many are in the market and believe it is going up that the ammunition to send it higher runs low. This is where you start to be careful and watch for breakdowns, but there is also a lot of liquidity being pushed into the market and that can continue the move despite excess bullishness. The crossover level at 29% bulls is long gone, but it did its job. The high on the last leg was 56.0% after starting at 35.6% on the low in February, the lowest it has been since July 2009 . . . until this last leg. 35% is the threshold level suggesting bullishness. Again, to be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 19.6% versus 18.5%. Bears are rising, another indication of pessimism and also a better indication for the rally. Surpassing 18.5% registered a month back. Down from 23.1% to start April, but making their way back. Fell like a stone on that decline, moving below the April 2010 low. 28.3% in September 2010. The 37.7% peak at the height of the crossover is well in the rearview mirror but bears remain well below the 35% level, above which is considered bullish for the market overall. Hit 18.7% on the low in April. Hit a high of 27.8% level on the prior leg in February. For reference, cracking above the 35% threshold considered bullish. Hit a high on the prior run at 47.2%. For more reference, bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment. Prior levels for comparison: Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: -19.99 points (-0.71%) to close at 2803.32
Volume: 1.806B (+0.84%)

Up Volume: 539.01M (-520.99M)
Down Volume: 1.24B (+528.96M)

A/D and Hi/Lo: Decliners led 1.99 to 1
Previous Session: Advancers led 1.01 to 1

New Highs: 59 (-24)
New Lows: 61 (+18)

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: -10.33 points (-0.77%) to close at 1333.27
NYSE Volume: 1B (+14.8%)

Up Volume: 258.63M (-203.49M)
Down Volume: 736.12M (+355.08M)

A/D and Hi/Lo: Decliners led 1.89 to 1
Previous Session: Advancers led 1.42 to 1

New Highs: 114 (-76)
New Lows: 43 (+13)

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

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


DJ30

Stats: -93.28 points (-0.74%) to close at 12512.04
Volume DJ30: 175.0M shares Friday versus 158.5M shares Thursday.

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


MONDAY

There is quite a bit of economic data next week. The important New Home Sales are on Tuesday, followed by Durable Orders on Wednesday. On Thursday we have the Initial Claims again and the second reading of the Q1 GDP. It is expected to rise to 2%, and maybe it will. There was some beneficial export data, but export data does not tell us much as far as I am concerned. It is not a real indication of economic strength or economic growth, unlike imports.

On Friday there is Personal Income and Spending, Michigan Sentiment, and Pending Home Sales. All important. It will be a week of important data, but it is also a week of technical action. With all of the undercurrents, that is what is driving the market. We have the dollar, gold, and foreign relations. We have what bonds are doing and, of course, stocks and economic data.

The action has been somewhat erratic, but that is what happens with an ABCD pattern. That gets people upset. They seeing that action the lower highs, lower lows and they say it will sell off. It could. It is no guarantee that it will make a break higher, but the possibilities are typically that it does rally back up into that prior resistance level. That is our initial target. When there is a good base after a solid rally, a new breakout, and then an ABCD consolidation, that would suggest that it will continue to the upside. That is why we have been focusing on the upside plays. Although we did make some money on the downside this past week with SSYS and the QID to name a couple.

There is also leadership. There is some good leadership, and there is some that is breaking down. We are seeing that in retail and in some technology stocks like AAPL. But AAPL has been struggling for quite some time now in its trading range. It has been bouncing back and forth, and this is just more of an up-and-down inside of its trading range. Some leaders are struggle, and that is normal. The key is whether the majority of leaders start to break down and the indices simply cannot hold the ABCD patterns and start to break lower as well. That is a different story altogether.

The action is erratic and there is a lot of pessimism with that put/call ratio bouncing higher. Still, that does not mean that the market is going to tank and roll over. There are a lot of factors that naturally get people on edge after a rally. The question is when the market will break. Eventually it will have to because the economy is not that strong. We are printing way too much money and we are ignoring inflation. In history, that has ultimately meant that we have serious problems in the stock market.

Again, the question is when it will happen. Nobody knows. This Saturday is supposed to be the end of the world. There are people making predictions with absolute certainty that the rapture will happen on Saturday, and we will have the end of the world with a massive earthquake. I do not know. The Bible I read just says that nobody knows when the master will come, and you should not spend your time worrying about it. It is best just to be prepared in the event he does come. How do you prepare? Do what the good book says and go about living your life as you should. Part of that is taking care of your family and making money for them. You also take care of other people with the other money that you make as well. That said, I will get off the soap box.

I will be looking at more upside plays because the trend is still in place. We will also look to the downside just in case. You always have to have a "just in case." Like "Shoeless" Joe Jackson said in Field of Dreams, "You have to watch for in your ear" even when you are looking at the most probable event. I will be looking at some downside plays just in case. The market is still trending higher. If it continues higher, we will make money to the upside. If it decides to give it up, we will button up our positions and make money to the downside. As long as it is moving, we will be making money.

Have a great weekend!



Support and Resistance

NASDAQ: Closed at 2823.31

Resistance:
2825 is the 2007 closing peak.
2841 is the February 2011 peak
2862 is the 2007 peak
2888 is the recent May peak
2956 from November 2000
3026 from October 2000 low
3042 is the May 2000 low

Support:
2816 is the early April peak
2802 is the early March intraday peak
2796 is the February gap down point
The 50 day EMA at 2793
2762 is the February low
2729 is the 127% Fibonacci extension of the August 2010 run
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low
2686 is the recent January 2011 closing low
2676 is the January 2010 low
2645-2650ish from December 2010 consolidation
2603 is the March 2011 low
The 200 day SMA at 2588
2580 is the November 2010 closing high
2569 is the November gap up point through the April 2010 peak


S&P 500: Closed at 1343.60
Resistance:
1344 is the February 2011 peak
1364 is the March 2007 low
1370 is the August 2007 low
1371 is the recent May 2011 peak

Support:
1340 is the early April 2011 peak
1332 is the early March peak
The 50 day EMA at 1329
1325-27 is the March 2008 closing low and the May 2006 peak.
1313 from the August 2008 interim peak
1295 to 1294 is the April 2011 low and the February 2011 consolidation low
1275 is the January 2010 low, early January 2011 peak
1255 is the late December 2010 consolidation range
1249 is the March 2011 low
The 200 day SMA at 1237
1235 is the mid-December 2010 consolidation low
1227 is the November 2010 peak
1220 is the April 2010 peak


Dow: Closed at 12,605.32
Resistance:
13,058 from the May 2008 peak on that bounce in the selling

Support:
The 50 day EMA at 12,425
12,391 is the February 2011 peak
12,283 is the March 2011 peak is bending
12,110 from the March 2007 closing low
12,094 is the April 2011 low
11,893 from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
11,734 from 11-98 peak
11,555 is the March low
The 200 day SMA at 11,545
11,452 is the November 2010 peak


Economic Calendar

May 16 - Monday
Empire Manufacturing, May (08:30): 11.9 actual versus 18 expected, 21.7 prior
Net Long-Term TIC Fl, March (09:00): $24.0B actual versus $27.2B prior (revised from $26.9B)
NAHB Housing Market Survey, May (10:00): 16 actual versus 16 expected, 16 prior

May 17 - Tuesday
Housing Starts, April (08:30): 523K actual versus 563K expected, 585K prior (revised from 549K)
Building Permits, April (08:30): 551K actual versus 590K expected, 574K prior (revised from 594K)
Industrial Production, April (09:15): 0.0% actual versus 0.5% expected, 0.7% prior (revised from 0.8%)
Capacity Utilization, April (09:15): 76.9% actual versus 77.7% expected, 77.0% prior (revised from 77.4%)

May 18 - Wednesday
MBA Mortgage Index, 05/13 (07:00): +7.8% actual versus +8.2% prior
Crude Inventories, 05/14 (10:30): 3.703M actual versus 3.703M prior
FOMC Minutes, May (14:00)

May 19 - Thursday
Initial Claims, 05/14 (08:30): 409K actual versus 420K expected, 438K prior (revised from 434K)
Continuing Claims, 05/07 (08:30): 3711K actual versus 3713K expected, 3792K prior (revised from 3756K)
Existing Home Sales, April (10:00): 5.05M actual versus 5.23M expected, 5.09M prior
Philadelphia Fed, May (10:00): 3.9 actual versus 18.0 expected, 18.5 prior
Leading Indicators, April (10:00): -0.3% actual versus 0.0% expected, 0.7% prior (revised from 0.4%)

May 24 - Tuesday
New Home Sales, April (10:00): 300K expected, 300K prior

May 25 - Wednesday
MBA Mortgage Index, 05/20 (07:00): +7.8% prior
Durable Orders, April (08:30): -2.0% expected, 4.1% prior (revised from 2.9%)
Durable Orders -ex Transportation, April (08:30): 0.6% expected, 2.3% prior (revised from 1.8%)
FHFA Housing Price Index, March (10:00): -1.6% prior
Crude Inventories, 05/21 (10:30): -15K prior

May 26 - Thursday
GDP - Second Iteration, Q1 (08:30): 2.0% expected, 1.8% prior
GDP Deflator - Second Iteration, Q1 (08:30): 1.9% expected, 1.9% prior
Initial Claims, 05/21 (08:30): 400K expected, 409K prior
Continuing Claims, 05/14 (08:30): 3700K expected, 3711K prior

May 27 - Friday
Personal Income, April (08:30): 0.4% expected, 0.5% prior
Personal Spending, April (08:30): 0.5% expected, 0.6% prior
PCE Prices - Core, April (08:30): 0.2% expected, 0.1% prior
Michigan Sentiment - Final, May (09:55): 72.4 expected, 72.4 prior
Pending Home Sales, March (10:00): -1.8% expected, 5.1% prior

By: Jon Johnson, Editor
Copyright 2011 | All Rights Reserved

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

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