No Quit in the Rally

SUMMARY:

- No quit in the rally as more fuel fuels more gains.
- SP500 that much closer to the top of its range as NASDAQ makes the break.
- September retail sales top expectations but remember, sales are based on prices and inflation is a factor in prices.
- Business inventories tick higher but they are not building as some say.
- Michigan Sentiment hits a 30 year low as income expectations hit all-time lows.
- Europe, China CPI's are hot.
- The real leading indicators: Manufacturing led us out of the recession, gave the early indication of a new economic slowdown, and after it bounced and other indicators followed, it is now leading lower again.
- Stocks are driving higher into earnings. Now with the indices up two weeks and at the top of the range will earnings drive stocks higher from here?

Another solid price advance pushes SP500 to the top of its range.

Stocks pushed ahead once again. After some shaky intraday patterns on Wednesday and Thursday, stocks found more fuel to the upside. That was pretty much gratis of GOOG's earnings. GOOG reported blowout earnings once again, putting to rest any idea that its results might be somewhat shaky. It gapped sharply to the upside, and that really ignited NASDAQ, taking it higher with a big gap. AAPL followed GOOG, and they go somewhat hand-in-hand. AAPL gapped and ran to a new closing high. Very impressive moves. It kept the rally alive in the market even after more than a week of solid upside gains.

Indeed, NASDAQ broke out of its range with the move, holding its early gap higher and adding to it as the session went on. SP500 posted a nice gain, closing out at session highs. It closed at roughly 1225, and that puts it just below that November peak were it never really was able to break free. We are still looking for SP500 to someday make it up to the March and June lows. It has not been able to do it yet. It is still in a trading range, though it did put in a new closing high in that range on Friday.

Stocks were ready to move from the get-go on Friday. There was some good news out with retail sales, and there were other issues that helped drive stocks higher. But again, it is really earnings and a better feeling about Europe. They are all merging right now and driving stocks to the upside. Investors are breathing a collective sigh of relief about Europe and go back to investing in stocks. We will see how far that goes; I have been talking about the economy lately, and I have some more things to talk about tonight.

Looking at the SPY, futures gapped to the upside. They rallied nicely into the open, tested midday, and were still holding nice gains. They put on a nice show in the afternoon, rallying back to session highs. Impressive moves once again.

NASDAQ, +1.8%; SP500, +1.75%; Dow +1.45%; SP600, +1.8%; SOX, +1.1%.

Bringing up the tail end were the semiconductors. They have had a good run to this point, so I will not hold it against them. Very nice action to round out a solid week that saw the indices bounce up to the top of the range in some cases (as noted with NASDAQ) breaking through the top of the range.



OTHER MARKETS

Stocks are moving higher. Investors feel better about Europe and maybe U.S. prospects because some of the economic data has been better for the past few weeks. As stocks moved higher, the dollar continued lower along with the other markets. They kind of reversed the course they have been taking as stocks sold.


Dollar: 1.3876 versus 1.3787 euro. The dollar continued to sell. It has not been down this road in quite some time. It broke just below the 50 day EMA, but that still keeps it below the low from mid-September. It has tested its trend. This is the most significant test back for the dollar since it did renew its run higher. Remember it sold off into May, rallied, and then tried to make a break but formed a somewhat upward-tilting wedge and broke down. Nice consolidation and a tremendous run on the fear about Europe. Now it is taking that out.

It is coming down to a key test, and that is this trio of tops. Indeed, there is another top and bottom along the way, just above the 200 day EMA around 7650 on the DXYO. It will be an important test for the dollar. It is at an important support level. We will have to watch this as next week progresses. As the U.S. economy has improved, ironically the dollar has dropped. A lot of that is money leaving the dollar and going to Europe after it fled to the dollar on fears that Europe would implode.

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


Bonds: 2.24% versus 2.17% 10 year U.S. Treasury. Bonds showed a similar chart pattern. A nice, strong breakout and rally through mid-September in the past two weeks. As the market recovered on the European situation, supposedly improving, the bond market sold. It was a decline again on Friday, but it is still holding its uptrend more or less. It is not holding the sharpest uptrend, but it is holding above the 50 day EMA. After this kind of run where the TLT has rallied from roughly 95 up to 125, a little pullback to the 50 day EMA is normal. We will see if it holds if there is worry once again interjected about the U.S. economy.

With earnings from GOOG looking good and this uptick in U.S. economic data, bonds have pulled back, but they have not broken their trend.

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


Gold: 1,683.20, +14.80. Gold bounced modestly. It continues in its upward-pointing wedge. I still think gold will break to the downside. The caveat is if Europe announces some crazy plan to run things up higher. In other words, if it does some Quantitative Easing or something along those lines, gold could jump up. Inflation is already crazy in Europe. The CPI for Europe in September grew at 3%. Huge moves. In China it was up 6%. They already have an inflation problem over there. If they throw gasoline on the fire with some Quantitative Easing, they will have incredible inflation. Massive stagflation. Today Jim Rogers said that the 1970's stagflation would be a piker (those are my words) versus what we will see with stagflation this time around if we keep up the crazy nonsense we are doing. So we have that wonderful nugget to digest down the road. Right now the market is not paying any mind to it, but we have to worry about that later.

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Oil: 86.98, +2.75. Oil continued to rally. It broke back through the 50 day EMA. It is just above the middle of its range from 80-90. As the dollar declines, you will see oil rally. Oil is denominated in dollars. If the dollar gets weaker, it takes more dollars to pay OPEC off for its oil. That is part of our importing inflation. That is why having a weak-dollar policy is such a bad idea when we have so little oil on our own. That is why the Obama administration's energy policy is insane. It is trying to get us off of oil by doing something I do not know what. Paying off solar companies with contributors, apparently? It is laudable to get us off of oil, but we will not make that jump overnight. We have companies trying to do these things, but they cannot compete with China right now. Maybe we should try to get to a point where we can, but we have to get things that actually work.

We are having a real problem, but we need a stopgap measure. We have to go to natural gas or develop more of our own reserves so we can make that transition. The problem is, while we are doing that, if you weaken the dollar for the export economy that he wants that benefits the big companies and hurts America and small businesses, you are going to cheapen the dollar and make everything more expensive. That just makes our energy more expensive. That makes our inflation more expensive. It is a pernicious cycle they have started. They truly do not understand economics. They do not understand how, if you squeeze one part of the balloon another part pops out. You have to understand the entire balloon, so to speak, and how applying pressure at certain points impacts it. They are just going around taking potshots at different areas, and the result is a horrendous sausage-making process. It will not turn out to be good sausage.

Oil is bouncing up as the dollar is selling. It is going higher. People are also thinking that the world economies are better than they thought, so they are pushing oil higher as well. Again, the key will be when it gets up to 90 in the top of that range. There is no reason for oil to go through that, but I will talk more about the economic activity later. As you will see, while things look better near term, I think longer term, we will have a real problem overall. Europe has that 3% CPI rate. We could have trouble here as well if we are not very, very careful. I can tell you right now, we are not being careful.

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



TECHNICAL SUMMARY

INTERNALS

All of the internals and market technicals got to extreme levels. They wanted to rally to the upside, and that is exactly they have done. Now the indices find themselves at the top of the range. Friday was not a stellar day.

Breadth. Advancers were solid at 3:1 on the NASDAQ and 4.3:1 on the NYSE. Pretty much matched the session as they should, but volume was low.

Volume. Volume was down 1.65B on NASDAQ. Down a fraction. Down 9% to a meager 758M on the NYSE.



CHARTS

SP500. SP500 moved up to the November peak. Got close to it. Closed near session highs, did not back off. Very nice. We will see what it can do next week. It has run along way, from below the bottom of the range to the top of the range in eight sessions. Next week we will see if it can make the break higher and actually make it up to the March and June levels starting around 1260 and running up to 1270. That would still be a nice run. It is at the top of the range. Still in the range for now. We will see if the large caps can make the move.


NASDAQ. NASDAQ broke out. It is above its September peak as well as the March and June lows. It is ready to bump up into this modest range of resistance that is near the 200 day EMA. On Wednesday it gapped to a doji right at resistance, but it paid it no mind. It showed excellent strength. It was aided by AAPL and GOOG's earnings on Friday, and it performed well. Volume has been very low as it moved up to this top, but MACD has broken to a higher high as the index moved to a higher high. It is doing what it should do, and we will have to see where it decides to pause. It is the time of year for techs. They are performing well, but we have some big names coming in next week including AAPL.

AAPL has run very well towards its earnings. It had a new closing high. It is also near the September intraday highs. It has put in a good run. If it runs through Tuesday, you can bet we will take some more option gain on the two plays we still have options on. We have some November and December options on them, and we will bank some gain ahead of those earnings. You can always leave some and let them go crazy to the upside like GOOG. Maybe you get it. But when you look at this run into earnings, the probabilities are that you may get some backtracking. With AAPL, you may get a big burst to the upside. If we do, we will take some more gain at that point. We are being driven by some big moves in some big names on NASDAQ. When we get used to the earnings, that might change the story. Not for now, though.


SP600. The small caps were up 1.8%. A nice move. Still below the August peak. Lagging and, of course, that tell us that the economy is not as great as people think it is. If the economy in the U.S. was going to take off, the small caps would be taking off. We are seeing a drive by the same old big names and multinational exporters that lead the market over the past three years. That is because of the lower dollar policy and the export-economy policy of the administration. Small caps are not the favored few because they create wealth, they create independence, and they give people the ability to tell the government, "We do not need you." The government does not like that; it wants us all to be beholden to it.

Small caps are lagging. Not good for the market and not good for the economy. Ultimately I think that is the reason we are going to go back into a recession whether it is an official textbook recession or not.


SOX. SOX rose 1.1%, and it, too, is approaching its prior high in the range. The last time it went up here, it gapped to that evening star and sold off. It showed a hammer doji or hangman doji on Friday just below that prior level. Worth watching. NASDAQ has laughed at those candlestick indications for the past week, but it cannot laugh at them forever. It has hit SOX on several occasions and has resulted in selloffs. Will this be the next one? It is below resistance. It is right at the top of the range. It is showing that hammer or hangman doji. We will see what happens here.

In sum, the indices had a great two weeks. They are up near the top of the range. NASDAQ was breaking out of the range. Will NASDAQ be able to pull the rest of the market higher with it? Or is the SP500 going to roll over at the top of its range? It did not look that way on Friday, but you also have the small caps. Are they tagging along, or will they act as a weight on the rest of the market? They are not the largest, most capitalized names, so they do not move markets overall. They do give a very good indication of our economic future, however.



LEADERSHIP

Technology. AAPL is at a new closing high. GOOG jumped massively on its earnings, gapping to the upside very sharply. They dragged a lot of names with them. That is just the way it goes AAPL and GOOG did great, no doubt about it.

NVDA had a great two weeks, but it has gapped to a hangman doji right at the old high. MACD is not making a higher high. It sold off on this kind of symbol last time. We will see what happens. This is something to consider. It is an important stock. BRCM is a semiconductor that is moving higher. It was upgraded, and it just missed taking out that prior high. Back in July it gapped to the upside on earnings and then rolled over and sold off hideously. Maybe it does not do that this time. It is up at this level and MACD is rising. Maybe it will eclipse the prior level. We will see. This is one to watch as well. It will not necessarily slow down. There is nothing saying it is in trouble maybe as much as NVDA. We just need to be watching how all of these stocks handle the prior highs because they are all getting up there right now. We want to see how they react.

Financial. JPM announced its earnings. They were not great. Did not sell off very hard. GS is still trending lower. WFC has been a decent performer. It has a little rounded bottom and is breaking higher. There are some financials that are helping support the move to the upside. Not raging and breaking out, but supporting the move to the upside.

Overall. A lot of what you see right now is the pattern of a little rounded bottom. That is about the only thing you can put any money in right now that is not overbought. Are they going to rally to the upside and keep the move going, or are they just late comers who were lagging all along and are not going to be able to hang with the market? If these big boys turn around and sell off, are they just going to collapse back down in their range? We will see what happens there. The market is divided into these two areas. There are those that have really surged and then those that are wannabe surgers. We will see if they can make the break higher.



THE ECONOMY

Retail sales surprise to the upside but is it real growth or inflation issues?


Business Inventories tick higher prompting some to say an inventory build means a good holiday season. Get off the crack.


Michigan Sentiment hits all kinds of records.


TO VIEW THE ECONOMY VIDEO CLICK THE FOLLOWING LINK:

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



THE MARKET

SENTIMENT INDICATORS

VIX. The VIX has fallen off of the proverbial table as the market has rallied. That is exactly what you would expect. Indeed, it has broken below an important support level. That bodes well for the market overall. It has made a good move, no doubt.


VIX: 28.24; -2.46
VXN: 28.69; -1.61
VXO: 27.15; -2.01

Put/Call Ratio (CBOE): 0.99; -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 does not have the cash to drive it higher.

Bulls: 34.4% versus 34.4%. Holding steady after dropping form 37.6%. Still below the important 35% level suggesting a bullish climate for stocks. Fifth 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: 46.3% versus 45.2%. Increasing the negative views, well above the 40.9% reading just three weeks back. Still well above the bulls and the 35% level considered bullish for the market. Fifth 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: +47.61 points (+1.82%) to close at 2667.85
Volume: 1.645B (-0.66%)

Up Volume: 1.28B (+160M)
Down Volume: 391.67M (-156.15M)

A/D and Hi/Lo: Advancers led 3 to 1
Previous Session: Decliners led 1.04 to 1

New Highs: 31 (+19)
New Lows: 24 (-1)

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: +20.92 points (+1.74%) to close at 1224.58
NYSE Volume: 758M (-9%)

Up Volume: 3.15B (+1.77B)
Down Volume: 532.65M (-1.987B)

A/D and Hi/Lo: Advancers led 4.34 to 1
Previous Session: Decliners led 1.55 to 1

New Highs: 46 (+15)
New Lows: 20 (0)

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

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


DJ30

Stats: +166.36 points (+1.45%) to close at 11644.49
Volume DJ30: 133M shares Friday versus 144M Thursday.

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


MONDAY

A huge, busy week next week. We have a lot on the economic data slate. That will be very important. Monday we have New York Empire Manufacturing. We will see if they can actually pull back out of the negative numbers. Not expected to do so. Industrial Production and Capacity Utilization is still expected to rise. We will see. If they go along with the recent bounce in data, they should do that. The core PPI on Tuesday is important. Wednesday brings the CPI, and that is also very important. Housing Starts are somewhat important. The CPI will be critical for us. It is expected to actually slow its rise. We will see. I do not trust the government with that one. Jim Rogers thinks they are lying, and I think he is correct. But I will not point fingers. That would not be the civil thing to do in this country that is acting so civilly of late.

Thursday Initial Jobless Claims are out once more. Existing Home Sales are much more important than Housing Starts. The Philly Fed is important. Will it pull another negative as anticipated? Will it be better or worse? It is anticipated to improve or to not be so negative. Some people say I should not be so negative, but it is in my nature. Leading Indicators are out on Thursday. Who gives a flip? Does not mean anything. The only man-made indicator worth anything is ECRI. ECRI already said we are going into recession. I have to go along with them. It does not say when, but it will not be too long.

Lots of news in manufacturing. That will be very important. It was the first to turn up, and it was the first to turn down when things started to sag early in 2011. Here's the rub. The thing that everyone is forgetting is that manufacturing has turned down again ahead of all other economic indicators. It has led the recovery. It led the decline this year. It started to recover and then started to turn down. The rest of the economic data is just now turning back. It has likely just turned up in time to start rolling back down with the regional manufacturing data. Consider that when you hear all the other things they are saying. You can make a good case and convince yourself that things are getting better, but everything bounces in a downtrend. But I do not want to be too negative, so I will move on.

What will really be driving things next week? The market will be important and, yes, Europe will be important while they try to get a plan together. Remember, all this good will and good cheer is because Europe has finally said "I guess we ought to do something." Then the markets rally and everyone feels better. Do not count on Europe doing the right thing. It has not done that in quite some time. What is the right thing? That is a good question. Is it what the U.S. wants? I do not think so. It should be what Iceland wants. I wrote a blog about this. Iceland was the poster child for all of the selloff in 2008 because it is just financial that is basically its economy. It took a bunch of these bad loans and bad mortgages, and it was crushed. No one would bail it out. It had to come up with its own scheme, and that was that the bond holders had to pay for it. In other words, those who had the contracts had to deal with it. If they could not stand, they went down. Banks went down and financial institutions collapsed. Now Iceland is in better position than any of the countries that tried to bail things out. By 2012, it will not have a yearly deficit in its economy. It has flushed out the system and is doing quite well.

We will have earnings next week, and that will be driving a lot of the action. AAPL's earnings come out Tuesday after the close. They will probably be blockbuster. The stock may rally ahead of that. The question is do you want to take some before or after? You can play the gamble and maybe go after. If it rallies up through Tuesday afternoon, we will probably take some more options off the table. Look at the pattern. Look how far it is. That is the market in general. They have rallied up to the next resistance level except for NASDAQ. It has broken through the intermediate resistance. The question is can they continue from here? There is nothing to slow them down. They are going quite well. If they get more good earnings, they should continue higher near term.

Remember how earnings work. Look back in June, July, and August; when you get the initial results, you get good moves. Then you can have a slump after that. It does not matter what kind of market you are in. Look at April. Pretty good. It sold off but came back. After awhile, the market gets the gist of what they will be, and it is harder to impress the market with the results unless they are blockbuster. After everyone gets used to what is coming, a huge number will benefit an individual stock, but the market overall has pretty much priced it all in.

The market had rallied ahead of earnings, as I suggested it would. It has continued into the early earnings. I did not think it would keep going as it has, but it has some big earnings that helped it out. The key is whether it turns down here or if it keeps going. We will be split. We will probably put 50/50 upside to downside on the plays for next week. This is an important point. We have some SPY, we have QID. We got some of that tossed back in our face. Fortunately we played the QQQ all the way to the upside. That helps. We will reload on those to the downside if it shows us that. I am not convinced that this thing will move higher. The economy does not suggest it will. Something will come up that will suddenly wake people. I think it will hit them with a sledgehammer about the economy and that will bring things down.

That is just what I think, however. Ultimately, you have to go with what the market tells you. It has rallied nicely. Some people believe the market is saying that things are rosy. NASDAQ has broken out. It is looking pretty good, but it is supposed to do that this time of year. SP500 has not broken out of its range yet. DJ30 has not broken out of its range yet. SP600 has not broken out of its range yet; indeed, it is lagging considerably. Mid-cap SP400 has not broken out of its range. The SOX is up at the top of its range, and it is showing a hangman doji on the candlestick chart. We have NASDAQ making the break. Good for it. It has GOOG and AAPL driving the show. AAPL is the strongest stock in the entire country. It is driving the action on NASDAQ.

Even NASDAQ has not broken to a new high. It has huge resistance overhead. I am still thinking we will have a pullback. Again, what I think does not matter a hill of beans to the market, but we will be ready for it. Just like we have been ready to play the upside and let upside positions keep running. If we get more good upside, we will let them run as long as they want to run. Then we will get the heck out of dodge if it rolls over and start to sell. As always, we will let the good stocks test, but those that we just played for a quick hit and got the gain, we will be out of there. Then we will look to the downside. We will take whatever the market gives.

It is an important week ahead. A lot of data and earnings. We have rallied two weeks up to the top of the range. We saw some good initial earnings. Often the pattern is that once we get the good earnings in, we have trouble. Then again, it is the end of the year. People are feeling a bit better. They are in denial of a lot of the data out there. They are saying no recession. They say we will have a great holiday season in the retail area. That is fine. You can be in denial a long time and things continue to run higher.

The market tends to overshoot near term but not long term. We can be in denial and things can continue much further than a rational person would think they could go. How many times have we seen that on this rally? It has made us a lot of money, so we just play it and let it run. If it rolls, it rolls. If it does not, we keep letting it run. We just take whatever the market gives. We play what it tells us to play, but we have a selection of plays to make. If we get good risk/reward, we take the shot. If it does not work, we get out.

Have a good weekend. Enjoy the beautiful weather (at least that's what we have down here). I will see you on Monday for a big week of data.


Support and Resistance

NASDAQ: Closed at 2667.85

Resistance:
2676 is the January 2010 low
2686 is the January 2011 closing low
The 200 day SMA at 2694
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:
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
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
2555 is the mid-August 2011 peak
The 50 day EMA at 2550
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 1224.58
Resistance:
1227 is the November 2010 peak
1231 is the late August 2011 peak
1234 is the August 2011 low
1235 is the mid-December 2010 consolidation low
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 1276
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:
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 1191
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 11,644.49
Resistance:
The August low at 11,700
11,717 is the late August 2011 peak
11,734 from 11-98 peak
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 11,968
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:
11,555 is the March low
11,452 is the November 2010 peak
The 50 day EMA at 11,352
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 14 - Friday
Retail Sales, September (8:30): 1.1% actual versus 0.6% expected, 0.3% prior (revised from 0.0%)
Retail Sales ex-auto, September (8:30): 0.6% actual versus 0.3% expected, 0.5% prior (revised from 0.1%)
Export Prices ex-ag., September (8:30): 0.3% actual versus 0.3% prior
Import Prices ex-oil, September (8:30): 0.2% actual versus 0.2% prior
Michigan Sentiment, October (9:55): 57.5 actual versus 60.0 expected, 59.4 prior
Business Inventories, August (10:00): 0.5% actual versus 0.4% expected, 0.5% prior (revised from 0.4%)
Treasury Budget, September (14:00): -$64.6B actual versus -$67.0B expected, -$34.6B prior

October 17 - Monday
New York Empire Manufacturing, October (8:30): -4.0 expected, -8.82 prior
Industrial Production, September (9:15): 0.2% expected, 0.2% prior
Capacity Utilization, September (9:15): 77.5% expected, 77.4% prior

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

October 19 - Wednesday
MBA Mortgage Index, 10/15 (7:00): +1.3% prior
CPI, September (8:30): 0.3% expected, 0.4% prior
Core CPI, September (8:30): 0.2% expected, 0.2% prior
Housing Starts, September (8:30): 595k expected, 571K prior
Building Permits, September (8:30): 610k expected, 620K prior
Crude Inventories, 10/15 (10:30): 1.344M prior

October 20 - Thursday
Initial Claims, 10/15 (8:30): 404k expected, 404K prior
Continuing Claims, 10/08 (8:30): 3690k expected, 3670K prior
Existing Home Sales, September (10:00): 4.94M expected, 5.03M prior
Philadelphia Fed, October (10:00): -9.6 expected, -17.5 prior
Leading Indicators, September (10:00): 0.3% expected, 0.3% 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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