Sunday, October 09, 2011

Will Market Test and Continue, or Roll?

SUMMARY:

- Jobs report revs up stocks . . . for a few minutes.
- Jobs report headline is better but the return of striking workers, rising overall unemployed, and the failure to keep up with population growth stall the stock advance.
- Stocks rally then give it back, but no collapse.
- Spending bill raises taxes but not just on those with million dollar annual salaries.
- Europe still a problem as Fitch cuts Spain and Italy.
- Consumer Credit falls the most in 16 months. Looking for a holiday season savior.
- Some solid leaders look spent as others, e.g. chips, try to step in and yet others form nice bottoms.
- Bullish advisors fall below 35%.
- Market in the in between zone: will it test and continue or roll?

Jobs report heralded as improved but the market doesn't necessarily buy it.

Friday was all about the jobs report. The market was up three days in a row (Tuesday, Wednesday, and Thursday), following that nice reversal session. SP500 broke below the range and then sold off further on Tuesday and reversed. Classic textbook move. It put in a very nice run right up to the middle of the range or thereabouts.

On Friday everyone was focused on the jobs report. It was better than expected. Nonfarm payrolls came in at 103K when just 60K were expected. For August it was 0 originally, but it was revised higher to 57K. Indeed, over the prior two months, there was a 99K upside revision. That was quite a nice boost for futures. When the news came out, the SPY jumped nicely. That is fantastic.

We actually had a little traction, but then the market started thinking about it some. What was it thinking about? 45K of those 103K were telecom strikers from VZ returning back to work. You take those out, and you are in line at 60K. But there was the 57K revision, and that is a nice boost. Even the private numbers were better. They came in at 137K versus the 83K prior, and that was revised up from 17K. We had some positive traction, and moreover, the average workweek bumped up to 34.3 from 34.2. But investors found fault even here. They saw that it was just getting back to the level it gave up a couple of months prior. Not good action. It is not really what you want to see, but it is improvement. You just have to take what you can get.

But here is the real rub or maybe there are two rubs. The long term unemployed came in at 6.2M. That is up 200K. Those are the ones who have been unemployed for six month or longer. Then there was also the bad news of the underemployed, what they call the U6 number. That is the total unemployed the people who do not have jobs, who may have fallen off the jobless claim rolls, and those who are underemployed. That rose to 16.5% of our jobs pool from 16.2%. That is not good. We have more people underemployed or unemployed. We are not keeping up with population growth, and we are not keeping up at a rate that would lower unemployment.

Indeed, in order to reduce the unemployment rate to 8% over the next year, we would have to create something on the order of 275K jobs a month. It can be done, but it is something that all of the prior stimulus money did not do. I can guarantee you that this $400-500B that the President is touting "pass the bill" will not do that either. It cannot do it. There are some unsavory things in this bill, and just like the healthcare bill, no one read it. Now they are reading, thank goodness. Congress is not doing anything with this. Harry Reid knows he cannot pass it right now, so he will not put it up for a vote. Of course Republicans are getting blamed for that. They are getting blamed for Harry Reid not being able to get enough Democratic senators lined up with him.

There are some nasty things in the bill. One of them being that we start losing deductions for as little as a $125K salary and I am not talking single. That is joint income. Greater than $125K aggregate income and they start stripping away deductions from your income tax. That is called raising your taxes, so you are being lied to. They say they will pay for it just by taxing people who make One million dollars a year or more, but that is BS. Go ahead and read it. Understand it and then tell people what you know. It will not fill the gap, and the President probability knows that. He is probably banking on it not passing so he can blame the other side. As he said on Thursday, he will run against a "do-nothing Congress." Of course that means the Republicans. You gotta love politics.


THE NEWS/ECONOMY

There were several other reports out as well. Wholesale Inventories were down a bit more than expected, but nothing major. Consumer credit was down 9.5B, and it was expected to rise 7B. That is the largest decline in consumer credit in 16 months. It was for August, and September was a bit better looking at Same Store Sales. There is some hope that things are improving. This week KSS said it would hire 40K seasonal workers. That is a big help. There is a lot of fear that the holiday season er, Christmas season is not going to be that strong. Hopefully everyone will decide to go ahead and buy, and then the retailers will need to stock their shelves.

Europe was still in the news, but it was somewhat quiet during the session. It was just the general idea that Europe would do what was necessary. During the session, Fitch downgraded Spain and Italy. After hours there was more activity. I think Belgium was being downgraded by Moody's. So there is a lot going on with Europe, and it may impact what is happening next week. It always seems to be something that is considered, no doubt.

The jobs report was a bit better. You will hear touting and crowing about it, but it is still pathetic. It still means we are net losers when it comes to the unemployment rate. We cannot keep up with population growth, and therefore we cannot reduce the unemployment rate. We are in a bad situation. We are supposedly in a recovering economy, yet we cannot create any jobs. People are saying that this number proves we will avoid recession. The problem is employment lags behind the economy. If we have this little bump in the employment report, you can say, it is improving. But what has happened overall in the past couple of months? The economic data has bounced. It was in a straight decline, but now it has bounced. What has happened? After employment went down, it was really ugly again. Initial jobless claims bounced a bit last week and the week before, and we have had the jobs report come back a bit. It has followed the improvement in the economic data. ECRI says we will have a recession, so we expect the other reports to start turning back down. When that happens, the jobs report will follow it as well.


The Friday Action.

The futures bounced higher on the news, but as the day wore on they gave up and turned negative. They bounced back to positive late in the day, but then rolled over once more. Investors could not make up their minds what they wanted to do ahead of the weekend. That makes some sense given that the market rallied for about three and a half days and then decided to cave in.

It was not a total collapse. Yes, the indices closed lower, but this could just be a test in an otherwise continuing run up the trading range. We have seen it before. Looking back in mid-August when the market started to rally off those lows, there were a couple of days to the upside, then a pause, and then three or four more days upside before it rolled back down. This is not unusual. We will not say this automatically means a rollover. But when you look at some of the indices, they do not necessarily look that great.

NASDAQ is holding at the 10 day EMA. It can pull it off and make another bounce as well. Maybe the Dow can. It went up and showed a doji on the session. The last time it did that at the peak, it sold off. We will see what comes out of this. It is not a done deal that the rally will continue, but it is not a done deal that it will roll over either. It is in the in between area. It will just have to show us what it wants to do. We played some downside today. We bolstered some downside positions because we wanted good representation if this r thing rolls back over. It is hard to move into upside plays, but I see a few out there in case it continues to move higher. Some stocks have already tested for a day or two. They were early leaders, and they are coming back to test. If they put in another test Tuesday and Wednesday, we could have some nice plays to the upside if this proves to be just a little pullback in an otherwise continuing bounce toward the upside peak of the range

SP500, -0.8%; NASDAQ, -1.1%; Dow, -0.2%; SP600, -2.5%; SOX, +0.44%.



OTHER MARKETS

Dollar: 1.338 versus 1.3429 euro. The dollar scored a gain to end the week in an otherwise down week. A nice reach lower to the 20 day EMA, and a recovery to hold the 10 day EMA support. This is exactly what you would expect to see in a continuing uptrend. The dollar is behaving very well, looking like it wants to continue to the upside.

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


Bonds: 2.06% versus 1.99% 10 year U.S. Treasury. Bonds struggled again with the 10 year falling sharply. But the long end is holding at the 20 day EMA and a nice doji. A perfectly natural, nice uptrend. We will see if it can bounce off and continue. Down for the week. There was some better news out of Europe and people kind of felt that Europe was getting things under control. Now comes the lick log. Will bonds bounce back up on some fear? That would likely mean a downturn in stocks as well. We will see. It is set up to do exactly that.

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


Gold: 1635.50, -17.70. Gold was down a little on the day. It has spent the last two weeks basing after that big selloff in mid-September. It has been bouncing around in a narrow range between 1650 and 1600. Looks like it will continue to do that for awhile until it can finish the base, get buyers behind it once more, and move to the upside.

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


Oil: 82.79, +0.20. Virtually flat, but it was up 4.5% on the week. A very good week for oil as it rebounded off the lows. It is now back above 80 and hanging on in that trading range between 80-90. It banged around there all through August and September before it broke lower to start October. Oil is still struggling. It will struggle as long as there is a perception that the world economies are struggling. For now that seems to be the perception that is holding.

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



TECHNICAL SUMMARY

INTERNALS.

The internals were somewhat quiet on the day.

Volume. Volume fell 7% on NASDAQ to 2B shares. It declined 3% on the NYSE to just over 1B shares.

Breadth. Decliners led 3:1 on the NASDAQ and decliners led 2.2:1 on the NYSE. Not a lot of excitement in the internals, but a lot of the fireworks already occurred when the market was selling off and we saw new lows in the thousands on the NYSE.



CHARTS

SP500. SP500 moved higher and reversed. It closed off the low, but it was in the lower half of the range for the day. It tapped the 10 day EMA on the low. It is holding above the August and September interim lows. It looks pretty good. Just taking a day off on lower volume right at the 10 day EMA. It is in the lower half of the range. It still has to prove that it can move up, but it could easily bounce to 1180. 1180-1200 is resistance, and the top of the range is near 1220-1227, that November 2010 peak. It is getting further into the distance, but it is still there and holding SP500 in check. Nonetheless, it has room to run to the upside. That is the point. The question is will it make that run, or will it roll over? We have a downside SPY play waiting in the wings. We are just following it higher to see if it is going to turn over and give us a downside play that we can take advantage of.


NASDAQ. NASDAQ showed very similar action. It tapped the 10 day EMA on its low as well, and then it rebounded off the lows of the session. Still holding in the middle of the range and still in good position to move higher. Very similar to SP500. It could just be a pause. It may want to take another day or two to rest and then make a break back to the upside. It has happened before on NASDAQ back in mid-August in that rally. It just took a day off and then continued to the upside.


SP600. The small caps took it the hardest. They tend to do that given the market we live in and the economy we live in. They fell right back down, but they also held near the 10 day EMA and above the bottom of the prior range before this breakdown and reversal last week. They are in good shape. They can make a bounce higher just as the other indices are. It is just at that decision point. Are they going to track higher to the top of the range or not?


SOX. The semiconductors enjoyed a positive day with that 0.44% gain. Of course they gave away a lot at the end. They rallied up to that resistance I talked about on Thursday at 360, and they tapped at the 50 day EMA. That also puts them at the gap point from mid-September, the peak from late-august, and the peak from mid-August. They ran right into that and showed a doji. That is not good. The stocks have moved four or five days to the upside. They may be winded, and we will see how winded they are. If they reverse, that is not good news. It sold off the last time it showed this kind of tombstone or evening star doji. It is showing one now, and it also showed one back in mid-September. This is a signal in a weak market that tends to point to a pullback. We will see how far it wants to pull back.

In sum, the indices are not in bad shape. They just took a day off after a good reversal and rally last week. The thing is, there are a lot of stocks that look ready to fall good name stocks. We have to be a bit concerned about what we have, but we are willing to give it the benefit of the doubt. We took positions to the downside mostly on Friday. I just want to be a bit more in place for some downside in case it comes. Maybe we have too many, but you want to be ready to make the play if they show you the move,



LEADERSHIP

Many stocks look like they are in position to roll back over. There are some strong stocks that just have the look of being somewhat weak. I will run through some in no particular order. These are stocks that have very high earnings growth rates right now compared to the rest of the market, and they are struggling. HUM has rallied back up to the 200 day EMA, and it looks like it wants to turn over. MA is up to the 50 day EMA, and it wants to break down. It broke through some support, and it looks like it might want to turn over and continue selling. In energy, CLB looks like it wants to go lower. We have been playing IOC, and it looks like it is trying to turn back over as well.

There are some great stocks that have done really well in the past. HLF has a bear flag extraordinaire. Quite a good stock, but it is in a bit of trouble. Kind of hard to find upside stocks in position to buy.

Semiconductors. SLAB has bounced to the upside. KLAC as bounced nicely to the upside. Many of these stocks have rallied. BRCM rallied, but now it is showing a tombstone or an evening star doji. It could turn back over and thus are not currently in a great buy position.

Others outside the chips are getting there, and maybe there is some improvement. WIRE is in manufacturing. It has broken higher and is now testing. Maybe it can put something together. TYL broke its trendline and is coming back to test. Maybe something can set up there as well. EGOV has formed a nice rounded bottom and it broke higher. Maybe it has a handle forming. CTXS is an old favorite. It is forming a rounded bottom, and maybe it can make a break. There are even some financials. STT has a rounded bottom that is trying to form as well. It is not definitive, but MACD is rising so there may be something here after all. In short, there may be some leadership coming from different areas to bolster what the semiconductors did this week. That would be great for the market.

Technology. This is traditionally a time for techs to rally, but some of the big names are struggling. AAPL is struggling after Steve Jobs' death. GOOG looks to be struggling near term as well. It has come up and formed a bear flag. If you are just trading it, it looks like it is working on some trouble. Longer term, after the huge gain, it is trying to form up a new pattern that is overall bullish. It is something of a triangle. That is why I always look at things on a weekly basis. It has a rally, this consolidation, higher lows, a constant top, and a little ascending triangle. After a pullback off of this recent move, it might be worth a play to the upside to try to capture a run to the top of the range. That is longer-term thinking. You have to think both short term and long term if you are going to make money in the market. We have the stock in position to move higher, but it has to come back after this bounce and perhaps give us a higher low. Then it can start back up to give us an entry point.

There are possibilities out here. Near term, a lot of stocks are overbought thanks to the bounce. A little rest, a little test, and a higher low after two or three days of testing and resting would have them ready to move back to the upside. They could provide upside entry points. This bounce got up quickly, and you did not want to chase it. There will be more plays if there is a test that makes a higher low on these good stocks that rallied to the upside, and if they give back a little bit of ground but continue to set up and form good pattern as they make the next break to the upside. Then we will have upside buys. We just have to see which way the market will handle the overall bounce.



THE MARKET

SENTIMENT INDICATORS

VIX. The VIX pulled back as the market rallied this week, but it has come back to sit right at the top trendline of its triangle and right over the 50 day EMA. As with bonds, the VIX is primed for a bounce higher. That would mean that stocks fall. We will see how it turns out. Stocks are in that in between range. They have bounced off the lows, and now what will they do? You could cut the intrigue with a knife.

VIX: 36.2; -0.07
VXN: 37.08; -0.24
VXO: 36.88; -0.29

Put/Call Ratio (CBOE): 1.16; -0.1


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 37.6%. After pausing a weak bulls fell below the important 35% level suggesting a bullish climate for stocks. Fourth 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: 45.2% versus 40.9%. Spiking higher and well above the bulls and the 35% level considered bullish for the market. Fourth 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: -27.47 points (-1.1%) to close at 2479.35
Volume: 2.077B (-6.94%)

Up Volume: 487.75M (-1.502B)
Down Volume: 1.59B (+1.338B)

A/D and Hi/Lo: Decliners led 3.15 to 1
Previous Session: Advancers led 3.31 to 1

New Highs: 9 (0)
New Lows: 59 (+10)

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: -9.51 points (-0.82%) to close at 1155.46
NYSE Volume: 1.066B (+3.29%)

Up Volume: 923.68M (-3.816B)
Down Volume: 3.95B (+3.662B)

A/D and Hi/Lo: Decliners led 2.2 to 1
Previous Session: Advancers led 4.76 to 1

New Highs: 31 (+1)
New Lows: 38 (+9)

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

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


DJ30

Stats: -20.21 points (-0.18%) to close at 11103.12
Volume DJ30: 188M shares Friday versus 190M shares Thursday.

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


MONDAY

How is the market going to bounce? How will it handle the success it has had? We will see what kind of data comes out. Again, after hours there was a problem. There were some cuts in other European entities. I do not know if Belgium will be an earth-moving situation, but it underscores that there are problems even though everyone felt that the ECB and EU were taking the steps needed to start grappling with the problem. After all this time, it is amazing that they are still talking about getting them to grapple with the problem versus actually doing something.

On Tuesday we have the FOMC minutes. Thursday brings initial jobless claims, and those are always big news now. We have the Treasury budget. Friday brings Retail Sales, and that is important. Import and export prices are important as well. There is Michigan Sentiment. We always want to see how the people in Michigan feel.

The big story will be a lot of earnings. It is that time of the year. We have people preparing for the holidays, and we have the preparation for what is typically a run toward the end of the year by stocks. Chips have made good moves this past week. If they test and hold, they could continue higher. We will start seeing earnings. We have had a bounce into earnings. Overall the market is still oversold. It is in its trading range, but I am not convinced it will be able to move higher. We cannot trust our guts. We just watch to see what a lot of stocks are doing. Some good stocks that have been market leaders have are struggling right now, and they are in trouble. We will see how much they can test, holding onto the moves they made this week. Then we will see if it can break back to the upside.

Earnings will play a role. We have had both positive and negative warnings. The rubber will meet the road starting this week. We will see who is still doing well and who is struggling. I think there will be some more struggling, but we have not had a huge number of warnings. There are some key warnings from the likes of FDX and LOW, but not an overwhelming number of warnings.

Earnings will play a role, and Europe will continue to play a role. Then we also have some bickering here in the U.S. There will be a lot of talk about the jobs numbers and what they mean. That will be vis-a-vis the jobs bill that the President wants passed. I call it a "jobs" bill, but I am merely being tongue-in-cheek. It is nothing more than another spending bill. It is a wish list for the people who will get what they want in other words, the FOB (friends of Obama). Those who pay the bills will not get what they want because they will have to pay MORE of the bills. $125K income earners will have to give up some deductions. You can read more about that.

The market has those same problems to deal with. Earnings, Europe, and our own economic issues. So far they have been handling it with aplomb. Yes, they have sold off in July and August, but they have held in the range and broke back higher after selling off and breaking the range. Now we are at the old lick log point. What will happen? Will it continue higher or will it turn back over?

If I was going to bet just for the heck of it, I would bet we test a bit and go higher. If we pull back and it looks like we are going to hold maybe SP500 comes down to 1140 or so and holds we may have to close some of our downside positions. If that is the case, we will get the break higher. There are a lot of stocks in great risk/reward positions to the downside, so we are picking up plays on them. We will look at more plays again for next week in the event that this rolls back over, but we will also pick up some upside plays.

There is not a lot out there for us to play based upon the rally this past week. A lot of stocks are overbought and at the top of their range. There are several stocks that are forming rounded bottoms and have not made their move yet. The semiconductors have rallied to the upside and may just need to pull back a bit, make a higher low, and then try to break out of their range. It can be done. You cannot presume or assume one particular direction in the market.

We have had a bounce and we are back in the range. Are the sellers going to run or will the buyers? We are in a range, and it could go either way. If we get a little pullback that does not break lower, we can close out some downside and be ready for an upside break. A lot of breaks that are overbought right now will set up for a continuation move inside their range.

It is just that kind of market right now. We are back in the range. That is good, I suppose; we have been doing pretty well in that range. We took a lot of gain this week playing that range. It also means that you have to be careful. There is always that one out of left field, and we could have a rollover as the false breakdown becomes a false recovery. We will just watch how the stocks set up. They will start telling us what is happening. If we get a nice, gentle pullback again, then we start looking to the upside. That means we have to button up the downside and get ready for a bounce up toward the top of the range. Again, since we are still in the range, it is just a bounce until it proves otherwise. Consider reading up on some of the things I talked about. You will be surprised at what you find in these bills that people are finally taking the time to read.

Have a great weekend!


Support and Resistance

NASDAQ: Closed at 2479.35

Resistance:
2512 is last week's gap down point
2532 is the early August gap down point
The 50 day EMA at 2537
2540 is the early November 2010 lower gap point
2546 is the early September 2011 gap down point
2555 is the mid-August 2011 peak
2569 is the November gap up point through the April 2010 peak
2580 is the November 2010 closing high
2593 is the November intraday high
2599 is the June 2011 low
2603 is the March 2011 intraday low (post-Japan low)
2612 is the late August 2011 peak
2645-2650ish from December 2010 consolidation
2676 is the January 2010 low
2686 is the January 2011 closing low
The 200 day SMA at 2695
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:
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 1155.46
Resistance:
1178-1180 is the October 2010/November 2010 consolidation low
The 50 day EMA at 1188
1196 is the November 2010 consolidation peak
1209 is the mid-August 2011 high
1220 is the April 2010 peak
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 1277
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:
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 11,103.12
Resistance:
11,178 from November 2010
The 50 day EMA at 11,319
11,452 is the November 2010 peak
11,555 is the March low
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 11,970
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:
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 3 - Monday
ISM Index, September (10:00): 51.6 actual versus 50.5 expected, 50.6 prior
Construction Spending, August (10:00): 1.4% actual versus -0.5% expected, -1.4% prior (revised from -1.3%)
Auto Sales, September (15:00): 4.1M expected, 3.97M prior
Truck Sales, September (15:00): 5.5M expected, 5.43M prior

October 4 - Tuesday
Factory Orders, August (10:00): -0.2% actual versus -0.1% expected, 2.1% prior (revised from 2.4%)

October 5 - Wednesday
MBA Mortgage Index, 10/01 (7:00): -4.3% actual versus +9.3% prior
Challenger Job Cuts, September (7:30): 211.5% actual versus 47.0% prior
ADP Employment Change, September (8:15): 91K actual versus 45K expected, 89K prior (revised from 91K)
ISM Services, September (10:00): 53.0 actual versus 52.8 expected, 53.3 prior
Crude Inventories, 10/01 (10:30): -4.679M actual versus 1.915M prior

October 6 - Thursday
Initial Claims, 10/01 (8:30): 401K actual versus 402K expected, 395K prior (revised from 391K)
Continuing Claims, 09/24 (8:30): 3700K actual versus 3725K expected, 3752K prior (revised from 3729K)

October 7 - Friday
Nonfarm Payrolls, September (8:30): 103K actual versus 60K expected, 57K prior (revised from 0K)
Nonfarm Private Payrolls, September (8:30): 137K actual versus 83K expected, 42K prior (revised from 17K)
Unemployment Rate, September (8:30): 9.1% actual versus 9.1% expected, 9.1% prior
Hourly Earnings, September (8:30): 0.2% actual versus 0.2% expected, -0.2% prior (revised from -0.1%)
Average Workweek, September (8:30): 34.3 actual versus 34.2 expected, 34.2 prior
Wholesale Inventories, August (10:00): 0.4% actual versus 0.5% expected, 0.8% prior
Consumer Credit, August (15:00): -$9.5B actual versus $7.0B expected, $11.9B prior (revised from $12.0B)

October 11 - Tuesday
FOMC Minutes, September. 21 (14:00)

October 12 - Wednesday
MBA Mortgage Index, 10/08 (7:00): -4.3% prior

October 13 - Thursday
Initial Claims, 10/08 (8:30): 406K expected, 401K prior
Continuing Claims, 10/01 (8:30): 3700K expected, 3700K prior
Trade Balance, August (8:30): -$46.1B expected, -$44.8B prior
Crude Inventories, 10/08 (11:00): -4.679M prior
Treasury Budget, September (14:00): -$67.0B expected, -$34.6B prior

October 14 - Friday
Retail Sales, September (8:30): 0.6% expected, 0.0% prior
Retail Sales ex-auto, September (8:30): 0.3% expected, 0.1% prior
Export Prices ex-ag., September (8:30): 0.3% prior
Import Prices ex-oil, September (8:30): 0.2% prior
Michigan Sentiment, October (9:55): 60.0 expected, 59.4 prior
Business Inventories, August (10:00): 0.4% expected, 0.4% 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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