Market Defies the Negatives

SUMMARY:

- After fighting off the negatives all week and holding the top of the range, SP500, DJ30 join NASDAQ with a breakout move.
- EU 'intensified negotiations' help fan a Friday rally.
- Earnings overall solid Friday, adding to the upside push.
- Dollar hits post-WWII low versus yen.
- Market defies the negatives and moves into the next range of resistance.
- Rally to a new high? Don't expect it, but will take what the market is giving out.


Indices defy the negativity as SP500, DJ30 follow NASDAQ's breakout.

Where there's a will there's a way, I suppose. The market took about every possible hit you could throw at it. There were problems with the European deal, economic issues here at home, and maybe some earnings that were not quite as good as some felt they should be (e.g., AAPL). Nonetheless, all week it held up in the top of its range AT the top of its range, so to speak. Remember the indices were trading in a range from August into October. The past week moved up to the top of that range and then consolidated laterally. The question was whether they were going to break higher or fall back down in the range. NASDAQ was the first to move to the upside. It broke higher last Friday and then sold back to test. This Friday it gapped higher again, moving back out of its range. This time it was not alone. It was joined by SP500, breaking out of its range. It was also joined by the Dow 30. Even the DJ20 broke higher out of its range. Very solid moves as a group of indices all moved up together.

I have to say, I had my misgivings as to whether this move could occur. After the action on Wednesday and Thursday, I started to change my tune a bit, particularly on Thursday as the indices reached lower, held the bottom of this recent lateral consolidation and rallied back. That is the first time the buyers have stepped in to rally stocks off of an intraday move. That showed a bit more bullish action as the consolidation went into its first week. Apparently that was enough to send it to the upside. Certainly my views and the views of the others here are not going to stop the market's move. The question now is, one, can they sustain the break? Number two, will it move just into this range of resistance below the April peak, or will it try to make the breakout?

Once again, I have to take negative side. I do not see how it can possibly do that given outlook for the economy. Then again, the market does not care what I think. It factors in the fact and the beliefs of millions of traders and investors. That is how it makes its moves. Even though we may have misgivings, we recognize the move and we were ready to play the move. Indeed, we have been playing the move even though we did not necessarily like it. It was one of those situations where your gut may say one thing, but you have to keep your eyes open and do what the market tells you to do.

We have a break higher in the indices. They could turn right back down next week if the European meeting this week is not as good as investors think it should be. There could also be some bad earnings next week that flip things back down. The key move now will not about the race higher. It will be the test of this break by SP500, the Dow, and the Dow 20. Will they hold a la the NASDAQ and then begin the move back upside? The interesting thing is NASDAQ already made the break. It has already tested the break and it is heading up. Now these other indices are joining it. Maybe the testing is done. That is one of the reasons we were moving into upside positions on Friday even though we had a gap to the upside. There are very solid plays that we have been looking at. Those that have formed that rounded bottom over the August-October time frame. As they were making breaks higher (as they have been doing in a staggered form all week), we moved into new upside positions.

Was there really a reason for this move on Friday? There was no economic news released. There was a lot of other news. As I mentioned, there was the EU news. There were supposedly "intensified negotiations" reported on in the morning. They were ahead of this weekend meeting, so that got everyone excited. They are talking this time, and Merkel or other Germans are not saying this deal will not fly. Now they were having "intensified negotiations," whatever that means, and the market took that as a positive that some kind of deal would be reached. Indeed, they were throwing out a figure of 1.3T Euros as a bailout amount. Of course that was less than the 2T heard earlier in the week, but that is better than a sharp stick in the eye or a thumbs down from Merkel as seen earlier.

There were some good earnings out. GE's earnings were rather in line and boring. HON reported a nice beat and upside guidance. It took off to the upside, breaking out of that little rounded type of bottom that I have talked about. VZ beat. It was not a great beat, but it was solid. We are seeing that with other stocks this week. INTC, GOOG, and others have posted some great earnings and are moving higher.

So we had reasons, but does it really matter what the reason was for the market to make the breakout? A breakout is a breakout, right? It does not matter what our feelings are or why we believe it happens. There is always the game of "pin the tail on the reason" why the market moved whenever there is a significant break upside or downside. It really does not matter why we think it happened. Everyone can hypothesize, but the market does not the react as much to the day-to-day news. It does short term, do not get me wrong. It will bounce one way or the other based upon a news story, but the overall trend occurs over time.

The indices broke lower to start October. They rallied back to the top of the range, and then they moved laterally along the top of the range until the breakout on Friday. While Friday may have been influenced by some of the news that got things going, the move was set up long before Friday ever came around. Whether it was Europe, earnings, both, or just the phase of the moon does not really matter in the long run. The question is what the technical action is on the breakout and then what happens afterward. As I said, who knows if this breakout can continue, but we do know that we had the break after it rallied up to the top of the range, and then the SP500 and NYSE indices followed the NASDAQ's lead to the upside.

Can it continue? Again I ask that question. I will answer it with another question: Who knows? I do know that things are extremely negative and kind of extremely positive at the same time. That may seem strange. Investor sentiment is way down. The bears have been on top of the bulls for several weeks. The bears are at 41%, sharply lower this week from the last couple of weeks, but they are still above the bulls that are at 35.8%. Those are the investment advisors. We have a cross over that has been ongoing now for close to a month, and it is very bullish. The sentiment is quite negative. At the same time, a lot of people are saying the market has to go up. They are overly exuberant about what will happen with the EU.

I heard some things today that made me think that times may be a-changin', so to speak. Early on I heard comments that I had not heard since the late 1970's. On some of the news shows, some analysts said that the best way for the U.S. to move forward is for it to manage its decline similar to the UK. A lot of this was said back in the late 70's as well. Things like, "The days of the U.S. are over" or "It has seen its best days." It was a nice experiment while it lasted, but how long could this thing called a Republic last, really? Of course then we proceeded to get Ronald Reagan in, and he reignited our entrepreneurial spirit and national pride. Then we had one of the most incredible 20-year booms the world has ever seen, creating over 200M jobs along the way. An amazing period in our history.

This extreme pessimism is a cause for optimism. I heard other things about this rally on the session. "It was a short squeeze. There was no real buying. There was no conviction." It was just expiration, a short squeeze that put the pinch on those that were trading the market short. No doubt rallies start with squeezes, but, again, this rally is a bit beyond that point for the moment. We have had this break to the top, and now a breakout. There will be shorts there because a lot of people are looking right at this 1225-1230 level. When SP500 broke over it, they were caught with their shorts down, so to speak, and they got squeezed where you do not want to get squeezed. That is how these things work. So it was partly that, but it is always partly short squeeze.

Lack of conviction. No one believes in it, and then you have a lot of stocks that have formed up that rounded bottom as I have talked about (HON, for instance). Over the past three months they have moved in this rounded bottom where there is a double bottom, an inverted head and shoulders, a cup pattern whatever it happens to be. Now they are breaking higher. This is the next wave of stocks to lead the market higher, and we are starting to see that happen. Indeed we were buying into that next wave of stocks again on Friday despite the moves already to this point.

When you see companies such as VSEA or LNKD are moving higher, you have to take note of that and participate in the move to the upside. You may not believe in the move. Your gut may tell you not to get involved, but your gut and the market do not go together. As I tell people in the seminars, you have to forget about what you have learned all your life about how you should react to buys and sells. I am not just talking about the stock market; it is about everything in life. You have to forget about all that. You have to start understanding stock movements and why they move. More importantly, just understanding that they are moving and to take advantage of it when they do.

That is the kind of market we are in today. Then when you see stocks set up in these bases, it is telling us there is accumulation ongoing. We may not believe it, but you cannot deny it. They are breaking higher, and you cannot deny that either. You can either be like some of the guys you see on TV and curse the night, or you can light a few candles, call your broker, or get online and make some trades to participate in the move.

On Friday the stocks were moving. They started higher. Futures were up and stocks went higher when the bell rang. There was a mid-day slump, but they never came close to negative. Then they rallied back in the afternoon to finish close to session highs.

SP500, +1.9%; NASDAQ, +1.5%; Dow, +2.3%; SP600, +2.3%; SOX, +2.25%.

Very solid moves. We have seen this back-and-forth movement all week. It is one of the things we were somewhat lamenting, but this time there was a difference. It was not just banging back and forth, day-to-day in a tennis match inside the trading range. This move broke it through the top of the range.


OTHER MARKETS

As you would probably suspect, the other markets were heading in different directions.

Dollar: 1.3863 versus 1.3772 euro. The dollar lost ground. The dollar is now at a post-World War II low versus the Japanese yen. Wow. It was down against the euro for four straight days. That is the first time it has done that since July of 2011. Certain not a banner day for the dollar or a banner week, for that matter. But it was not beaten to a pulp either. It is still holding at its support after a nice break to the upside. The dollar holders are not ready to give up and say that Europe has its problems solved. That is what this chart is telling you. There is some doubt, but they have not given up and said it is a fait accompli.

http://investmenthouse.com/ihmedia/dxy0.jpeg


Bonds: 2.21% versus 2.18% 10 year U.S. Treasury. Bonds had fallen back down to the 50 day EMA but, as with the dollar, they have not given up their trend. There is some doubt that Europe will do what it needs to do or at least what our Treasury Secretary and others are telling them they need to do. If they do not, the bonds can bounce right back up on fear. We will have to see how it plays out. This is an important test, but a test in an uptrend nonetheless.

http://investmenthouse.com/ihmedia/tlt.jpeg


Gold: 1,636.20, +23.30. Gold bounced back. This was the week that it broke down from that upwardly-pointing wedge. It came close to 1600, falling down to 1605 on the low. Now it is bouncing. We have gold to the downside. I do not think we have overstayed our welcome on the downside move. Maybe we did, but I still think it will find a lot of resistance at 1650. I still think it will come back lower, closer to 1550 before it moves significantly back to the upside. What will that have set up, mind you? The old ABCD pattern. If it goes down to 1550 or right around the 200 day EMA and bounces from there, that will be a great buy on gold.

http://investmenthouse.com/ihmedia/xgld.jpeg


Oil: 87.46, +1.39. Oil bounced upside once more. It closed off of its high. It is trying to bump back up at the top of the range at 90. It is just above mid-range, and it is trying to hold. It has been very volatile this week, but the theme is still holding this move higher off of the late-September low. Looks like it wants to try to bump 90. That will be a very important test. If Europe comes up with something, it will definitely give that a run. If Europe does not, we will see it fall back down in relatively short order.

http://investmenthouse.com/ihmedia/xoil.jpeg



TECHNICAL SUMMARY

INTERNALS

Internals were solid, but you have to juxtapose that with the fact that it was expiration Friday and that will skew the numbers.

Breadth. Breadth was solid on NASDAQ at 3.5:1. It was a very solid at 5.4:1 on the NYSE.

Volume. Volume actually fell on the NASDAQ by 2.5% to 1.97B. No expiration effect there. It was up 18.5% on the NYSE however, topping 1B shares. Maybe a little expiration bump there, but it was nothing really impressive as far as the trade. It did push volume up to average on the NYSE.


CHARTS

SP500. SP500 broke above resistance. It cleared the recent highs as well as the late-August peaks. It is at 1238. That takes it beyond 1227 that was that November peak. Finally, after several month of waiting, it is now looking toward the March low at 1250 and the June low at 1260 or so. You have another 12 to 22 points before it hits those levels. The large caps are in position to challenge them now. Again, the question is do they rally higher or test first? NASDAQ has already tested and succeeded, so it may just be a case where these indices continue higher following NASDAQ as it has already done the heavy lifting for them. What is the next run? We look for a test to March or June at 1250-1260. That is when things get tough. That will be a serious resistance range. It has to break through that to get to the next serious resistance range that would perhaps allow it to challenge the April and May peaks up near 1370 or so. It is making the headway. It is surprising; you may not believe it is happening, but it is. We will see if it can hold the move and continue on.


NASDAQ. NASDAQ has already made the break. It did so two Friday's back, and it spent this past week testing. There was that Thursday move where it tapped the 50 day EMA and reversed. First-time buyers had showed up intraday, and then it gapped to the upside. It was not a breakout for NASDAQ. It did not clear the prior highs, but it was an important move because it managed to move back up over resistance and has but in what looks to be a successful test of that breakout move. Now it will challenge very significant ranges, as noted before. That takes it all the way back to 2007 levels, these shoulders from that head and shoulders that lead off into the massive decline in 2008. It will be a very tough range for it. It is a breakout, it is a move, but now it has to figure out where it will go from here. It is pretty tight up to these levels at 2700, 2710. That gets it up another 60 or 70 points. That is not a bad move, but it gets it very serious in here with some heavy duty resistance. It may have the help of the SP500 and the Dow to send it higher, however.


DJ30. DJ30 also broke over its recent highs and it broke through the March lows. It is aiming at the June double bottom. That little double bottom is not far away. Serious resistance at 1200 psychological and actual price resistance at that level. It has problems as well. It is just trying to retake all of these prior peaks, but it is a "one step at a time" program. It has to shoot down that resistance. You have to hand it to the indices, they did it on Friday.


SP600. SP600 had a 2.3% gain. Back up to last weeks' highs. Still in their range and still below the August peak. They are following but they are not inspiring a lot of belief that the economy will be super anytime soon.


SOX. The SOX was up 2.25%, well off its high on the day. Still well off last week's high, and well off the September highs. It is just not leading here. I guess we will take following for now, as long as we can get some of the indices to move higher. We have to watch the SOX. It was one of the first to notch the lead lower earlier in the year. If it does not follow here, that is very significant. We would look for the moves by the other indices up into the next range to be truncated ultimately by the SOX acting as an anchor chain and dragging them back down. If the semiconductors do not perform well, the economy will probably not do that well. Any breakout by SP500 and NASDAQ that moves up into this upper range will be impeded by the SOX falling back down. We have to watch for that as the weeks unfold. For now we have a break higher. That is obviously a positive move, and we will play it. The question is how much play we will get out of it.


LEADERSHIP

Financial. JPM was trying to make the break through the 50 day EMA, but it could not. MS is playing above its 50 day EMA, but it could not put a lot of mileage on anything. WFC had a decent move, up over 2%. It is trying to stretch its move. These are not ones to write home about, but they are trying to make hay to the upside. A rounded bottom, a break higher, and struggling a bit. But it is putting the moves on again and trying to make its mark to the upside.

Retail. ANF has an interesting pattern. Nice flag. It has its double bottom/rounded bottom ready to move higher. BEE is breaking higher out of its own rounded bottom. Very interesting. I will call that retail because it is a hotel/motel type. A little stretch, but give me a break. COH is trying to make a break higher. It is not surging, but we did see surges from stocks this week. TSCO is breaking higher. On Friday we saw CMG smash to the upside along with MCD. I am eating crow burgers today for getting out of my MCD the day before earnings. Good call.

Transportation. The transports broke out. CSX broke higher from its lateral consolidation. JBHT formed a nice pennant after it reversed its trend and broke nicely higher. We have rails breaking higher, we have freight breaking higher. Very nice to see the transports following and breaking out with the Dow. That is some kind of Dow theory signal, although it is not a new high. It is just a break higher, but it is a positive synergistic move to the upside.

Energy. Energy remains somewhat of an enigma. It has improved off its lows, but it is not breaking out as other areas are. CHK has rallied up to resistance. Kind of struggling. HAL rallied but it faded this week. It looks like it wants to break to the downside. VLO is trying to make the break over resistance. We will see if it does. The point is that energy has recovered some, but it is not breaking higher. That is an interesting feature as well. It has something to do with economies. Energy follows economies or leads economies, and it is not making a strong move to the upside here. We need to watch this as time goes on.

Technology. AAPL was the big story. It missed its earnings and it is testing its 50 day EMA. GOOG hit its earnings and gapped upside. It is moving laterally. We will see if it can move higher. It was not a breakaway gap, so we will see what it can do. There are others setting up and trying to move well. NTGR has a nice rounded bottom, forming a handle. You have to like that. JNPR is trying to set up and turn the corner as well. RAX had a nice break to the upside, and now it is testing that move. FFIV is the same thing. A nice handle test. These are the cloud companies. They were the big leaders back in 2009. They sold off. They have had a deep correction, and now they are trying to step up and become some of those stocks that take the lead or assist in taking the lead now that some of the horsemen who pulled the markets higher have to take a break.



THE MARKET

SENTIMENT INDICATORS

VIX: 31.32; -3.46
VXN: 31.42; -3.36
VXO: 30.14; -3.42

Put/Call Ratio (CBOE): 0.86; -0.52


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: 35.8% versus 34.4%. Rising for the first time in several weeks but still over 35%. 35% is the threshold measuring bullish versus bearish action. Sixth week the bulls are below bears and the gap is widening. A powerful sentiment signal. Solid move lower from 49.5% in late July. Highs from April and December (60% readings spanning December through early May 2011). The 5 year high is 62.0. The crossover level at 29% bulls from July 2010 is long gone. 35% is the threshold level suggesting bullishness. To be seriously bearish it needs to get up to the 60% to 65% level.

Bears: 45.0% versus 46.3%. Fading off the high but still well over 35%, the level considered bullish for the market. Sixth week of bears over bulls and six weeks over the 35% threshold considered a bullish indicator and have made that important crossover of bulls. 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: +38.84 points (+1.49%) to close at 2637.46
Volume: 1.975B (-2.47%)

Up Volume: 1.73B (+778.28M)
Down Volume: 416.54M (-663.46M)

A/D and Hi/Lo: Advancers led 3.48 to 1
Previous Session: Decliners led 1.09 to 1

New Highs: 40 (+40)
New Lows: 26 (+26)

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: +22.86 points (+1.88%) to close at 1238.25
NYSE Volume: 1.075B (+18.52%)

Up Volume: 3.69B (+840M)
Down Volume: 764.71M (-665.29M)

A/D and Hi/Lo: Advancers led 5.41 to 1
Previous Session: Advancers led 1.3 to 1

New Highs: 78 (+50)
New Lows: 16 (-19)

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

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


DJ30

Stats: +267.01 points (+2.31%) to close at 11808.79
Volume DJ30: 264M shares versus 166M shares Thursday.

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


MONDAY

With those leaders trying to step up, the market has a good shot at continuing this run. That is why we are buying into the move, pure and simple. There is a lot more data next week, and there are a lot of earnings. One third of the SP500 reports earnings in the coming week. It will be a huge week for earnings and for data. Case/Shiller, Consumer Confidence, Durable Goods Orders, New Home Sales, Initial Claims. The advance GDP for the third-quarter will be important. 2.2% we will see. Personal Income and Spending and Michigan Sentiment end the week. A lot of news and a lot of earnings.

Of course we also have our friends over in Europe who will be trying to solve their financial problems. A lot of things can push and pull the market different directions, but we are going to continue to look at these stocks that have had these rounded bottoms and can provide leadership to the upside. Because we have had a break higher in the indices themselves. Again, I do not think they will break to new highs on this, but we can challenge the prior range, rattle around in there and make some money. We sure made money rattling around in this range. Play the move up, see how it tests, and then we can play it for as far as it will run. Then if it sets up into a back-and-forth trading range once more and it is a decent range looking at it. It is just the same size as the one it just broke out from. That gives us plenty of opportunity to make great money. We are going to look to do that using these plays. I am looking at the SP500, but it is the same type of pattern of the other plays that we have been looking at. We will use them until we cannot use them anymore.

Maybe the market runs out of juice because the economy just cannot hang. Okay. It will get there eventually. Until then we will not wring our hands about how terrible the future will be. We can talk about it; it is a lot of fun to make fun of our fearless leaders and talk about how they are screwing up and how we would do things so much better if we were there. That is all part of the process. But it comes down to what the market is doing and how we can make money out of it. Even if we feel like things might be going to hell in a hand basket, if we can make money in the near term buy playing the upside, we will make money in the near term by playing the upside. We may have to flip it back to the downside and make a lot of money as things sell off quickly again, but that is what you do. We are traders and investors in this market. You take what the market gives, and that means you have to be ready to move. And we will be.

For now, I like these little rounded bottoms. We will see how far they can take us. Enjoy your weekend. We are getting carried away by the mosquitoes down here, but I take solace in the fact that winter will be here eventually and two or three of them might die when the weather gets down to 35 or so.

Have a great weekend!


Support and Resistance

NASDAQ: Closed at 2637.46

Resistance:
2643 is the September 2011 high
2645-2650ish from December 2010 consolidation
2676 is the January 2010 low
2686 is the January 2011 closing low
The 200 day SMA at 2692
2706 to 2705 is the April 2011 low and the February 2011 and consolidation low (bottom of the trading range) 2723 to 2705 is the range of support at the bottom of the January to May trading range
2759 is the May low
2762 is the February low
2796 is the February gap down point
2816 is the early April peak.
2825 is the 2007 closing peak.
2841 is the February 2011 peak
2862 is the 2007 peak
2879 is the July 2011 peak
2888 is the May 2011 peak

Support:
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low
2593 is the November intraday high
2580 is the November 2010 closing high
2569 is the November gap up point through the April 2010 peak
The 50 day EMA at 2563
2555 is the mid-August 2011 peak
2546 is the early September 2011 gap down point
2540 is the early November 2010 lower gap point
2532 is the early August gap down point
2512 is last week's gap down point
2469 is the November 2010 low
2331 from October 2010 low and the August 2011 intraday low
2305 from the August 2010 peak (summertime base)
2139 is the May and June 2010 low
2123 is the August 2010 gap down point
2100 from the August 2010 lows


S&P 500: Closed at 1238.25
Resistance:
1249 is the March 2011 low (post-Japan)
1255 is the late December 2010 consolidation range
1275 is the January 2010 low, early January 2011 peak
The 200 day SMA at 1275
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1313 from the August 2008 interim peak
1318.51 is the May low
1325-27 is the March 2008 closing low and the May 2006 peak.
1332 is the early March peak
1340 is the early April 2011 peak
1344 is the February 2011 peak is being challenged again
1357 is the July 2011 peak
1364 is the March 2007 low
1370 is the August 2007 low
1371 is the recent May 2011 peak

Support:
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
The 50 day EMA at 1196
1178-1180 is the October 2010/November 2010 consolidation low
1131 - 1127 from August 2010 base peak.
1119 is the early August closing low
1109 is the mid-September 2010 gap up point
1101 is the August 2011 low
1075 is the October 2011 intraday low
1099 from the mid-July interim peak
1090 is the early September 2010 gap up point
1040 from the August 2010 lows and May/June 2010 lows
1011 is the summer 2010 low


Dow: Closed at 11,808.79
Resistance:
11,867 from the August 2009 high and peak on that bounce in the selling.
11,893 from March 2008 closing low
The June low at 11,897 (closing)
The 200 day SMA at 11,966
12,094 is the April 2011 low
12,110 from the March 2007 closing low
12,283 is the March 2011 peak
12,391 is the February 2011 peak
12,876 is the May high
12,754 is the July intraday peak
13,058 from the May 2008 peak on that bounce in the selling

Support:
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,700
11,555 is the March low
11,452 is the November 2010 peak
The 50 day EMA at 11,392
11,178 from November 2010
10,978 is the bottom of the November 2010 consolidation
10,750 from September 2010
10,720 is the August closing low
10,705-710 from January 2010 peak
10,694-700 from August 2010 peak
9938 is the August 2010 low


Economic Calendar

October 17 - Monday
Empire Manufacturing, October (8:30): -8.48 actual versus -4.0 expected, -8.82 prior
Industrial Production, September (9:15): 0.2% actual versus 0.2% expected, 0.0% prior (revised from 0.2%)
Capacity Utilization, September (9:15): 77.4% actual versus 77.5% expected, 77.3% prior (revised from 77.4%)

October 18 - Tuesday
PPI, September (8:30): 0.8% actual versus 0.2% expected, 0.0% prior
Core PPI, September (8:30): 0.2% actual versus 0.1% expected, 0.1% prior
Net Long-Term TIC Fl, August (9:00): $57.9B actual versus $9.1B prior (revised from $9.5B)
NAHB Housing Market Survey, October (10:00): 18 actual versus 15 expected, 14 prior

October 19 - Wednesday
MBA Mortgage Index, 10/15 (7:00): -14.9% actual versus +1.3% prior
CPI, September (8:30): 0.3% actual versus 0.3% expected, 0.4% prior
Core CPI, September (8:30): 0.1% actual versus 0.2% expected, 0.2% prior
Housing Starts, September (8:30): 658K actual versus 595k expected, 572K prior (revised from 571K)
Building Permits, September (8:30): 594K actual versus 610k expected, 625K prior (revised from 620K)
Crude Inventories, 10/15 (10:30): -4.729M actual versus 1.344M prior

October 20 - Thursday
Initial Claims, 10/15 (8:30): 403K actual versus 403k expected, 409K prior (revised from 404K)
Continuing Claims, 10/08 (8:30): 3719K actual versus 3690k expected, 3694K prior (revised from 3670K)
Existing Home Sales, September (10:00): 4.91M actual versus 4.92M expected, 5.06M prior (revised from 5.03M)
Philadelphia Fed, October (10:00): 8.7 actual versus -8.8 expected, -17.5 prior
Leading Indicators, September (10:00): 0.2% actual versus 0.3% expected, 0.3% prior


October 25 - Tuesday
Case-Shiller 20-city, August (9:00): -3.5% expected, -4.11% prior
Consumer Confidence, October (10:00): 46.0 expected, 45.4 prior
FHFA Housing Price Index, August (10:00): 0.8% prior

October 26 - Wednesday
MBA Mortgage Index, 10/22 (7:00): -14.9% prior
Durable Orders, September (8:30): -1.0% expected, -0.1% prior
Durable Orders -ex Transportation, September (8:30): 0.4% expected, 0.0% prior (revised from -0.1%)
New Home Sales, September (10:00): 300K expected, 295K prior
Crude Inventories, 10/22 (10:30): -4.729M prior

October 27 - Thursday
Initial Claims, 10/22 (8:30): 403K expected, 403K prior
Continuing Claims, 10/15 (8:30): 3700K expected, 3719K prior
GDP-Adv., Q3 (8:30): 2.2% expected, 1.3% prior
GDP Deflator, Q3 (8:30): 2.5% expected, 2.5% prior
Pending Home Sales, August (10:00): -1.0% expected, -1.2% prior

October 28 - Friday
Personal Income, September (8:30): 0.3% expected, -0.1% prior
Personal Spending, September (8:30): 0.6% expected, 0.2% prior
PCE Prices - Core, September (8:30): 0.1% expected, 0.1% prior
Employment Cost Index, Q3 (8:30): 0.6% expected, 0.7% prior
Michigan Sentiment - Final, October (9:55): 57.5 expected, 57.5 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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