Another Early Rally is Squandered

SUMMARY:

- Another early rally is squandered as SP500, NASDAQ fail to break back out of the Eurozone range.
- US data, European bonds look better on the week but a Fitch ratings move Friday afternoon overrides the positives.
- Longer term patterns still pointing toward danger in 2012.
- SP500, NASDAQ still need to break out of the EZ (Eurozone), but many stocks look ready to support a breakout near term.

A second early bounce runs out of bids.

It was yet another week that logged solid gains in U.S. economic data. Retail Sales were good enough. Business Inventories were solid. The Fed kept the rates steady and said it would continue to do so through mid 2013. But there was even better data than that. The Fed is the Fed, and it has had rates low for a long time. Jobless Claims fell to 366K. That is the best since 2008. The PPI was holding steady. Prices were not going anywhere. Empire Manufacturing tripled expectations. Capacity Utilization held in solid. The Philly Fed more than doubled expectations. We are seeing improvement in the economic data for the third straight month; indeed, extending over three months. We had some issues with earnings warnings. They have been a problem, particularly with semiconductors. We also had some really good news from the likes of FDX. It had a great earnings report. ADBE had a great earnings report as well. There are warnings and there is a lot of concern about 2012, but the data has been steadily improving.

The problem is that last week the U.S. stock indices did not have a great week. They started off weaker, unable to continue the prior Friday's bounce. They sold off through Wednesday. On Thursday and Friday they managed to put in a rebound, but it was nothing great. Why do I say that? Number one, it was of no size compared to the Monday-Wednesday selloff. More than that, SP500 and NASDAQ fell back into their August-October range known as the "eurozone," American style. I call it the eurozone because every timed the EU has real troubles, U.S. stocks fall into this August-October range. As noted, SP500 and NASDAQ fell into it. On Thursday and Friday they did try to break back out of that range, but it was an effort that bore no fruit. Both sessions SP500 tapped at the level to beat, but it was beaten by that level. In other words, it sold back each session, though it did post modest gains.

We had decent economic data. We are still improving, but the U.S. stock market faded. It was not a collapse. We are still in position to make a higher low and continue the move to the upside. It was just disappointing to see a breakout stall again just as a breakout stalled in late October and early November. We had two breakouts and now two stalls. What was the reason for the pullback? The economic data was not bad, and some of the earnings results were a bit disconcerting, but it is primarily Europe. I call this the eurozone for good reason. Every time there is real trouble out of Europe, U.S. stocks fall back into this range. Of course there are ongoing problems in the EU, but I am speaking of when they come to a boil or when a certain story hits and spooks investors. On Friday it looked as if the market may have been able to make a break to the upside. As on Thursday, the futures were up. Even though they were whittling back ahead of the open, stocks jumped higher as the market got underway. All of the indices were trading to the upside.

Bonds in Europe were trading better. There was a vote of confidence on the austerity measures for the country. The Italians were standing firm, and that helped the market. Bonds across the continent improved. They rallied, and that means yields fell. That is positive. The problem is yields have been raging higher because no one wants to lend the EU countries any money. That is bad you need money to operate. The banks have to be able to trade. Thus the dollar facilities and other aids that have been announced over the last three weeks.

That was not enough, however, to keep the market moving higher. Why? Fitch, a ratings company, joined Moody's and S&P in putting most of Europe (including France) on a negative credit watch. There have not been any downgrades, but negative credit watch is the first step in doing so. Now that the Big Three have put the continent on negative watch, it is just a matter of time before there are specific downgrades to debt. And, let's face it, there should be. If the U.S. is downgraded, then all of Europe should be downgraded. That just goes to show you it is a subjective, touchy-feely business that these guys are in. They should have downgraded Fannie Mae and Freddie Mac a long time before they actually did, but they missed it. They were asleep at the wheel. Same here. They have been asleep at the wheel, and now they are downgrading well after the fact. It is after everything is basically known.

It was that news that helped scuttle another rally attempt. The bids dried up and stocks sold into lunch. Not a banner day. Then they traded laterally into the close. It was not a complete disaster. It was not a collapse, but it was not a great session. The indices closed mixed.

SP500, +0.3%; NASDAQ, +0.56%; Dow, -0.02%; SP600, +0.83%; SOX, +0.81%

It was not carnage, but it was disappointing because the indices were unable to hold an early gain once again. They almost snatched defeat from the jaws of victory.


OTHER MARKETS

Dollar: 1.3032 versus 1.3020 euro. The dollar was down early. It was struggling because things looked better and Europe was stronger. By the close and Fitch's missive with respect to the credit worthiness of European sovereigns, the dollar gave back some of the loss. It strengthened versus the euro, but it never caught up on the day. There was still a slight loss on the dollar, but it was a huge week for the dollar as it broke to a new high for the year. It was moving across that September peak as well as topping the January peak. It pulled out just ahead of it and is now testing back. Of course you would expect it to test after such a nice run to the upside, breaking two key levels and now bumping up into the December 2010 peak. Great move by the dollar on the week, but it moved because of our friends in Europe.




Bonds: 1.85% versus 1.91% 10 year U.S. Treasury. Bonds enjoyed another rally overall. Money is fleeing Europe and coming to rest in U.S. Treasuries once again. Now we have the bonds challenging the mid-November peaks as well as the September and early-October peaks. Very strong move by debt instruments in the United States last week. Again that is due to issues with respect to Europe. With the U.S. data improving as it has been, in most situations you would expect to see bond yields rising and bonds themselves falling. Not the case given the extracurricular influences on the U.S. market.




Gold: 1,596.60, +21.40. Gold had a very difficult week. It sold off, broke lower on Monday, and it fell the entire week. It had a modest bounce on Friday after showing a Thursday doji. There is a bounce to the upside after a pretty good bloodletting downside this past week.




Oil: 94.10, +0.23. Oil struggled all week as well. It found a little bit of purchase on Friday, but that was barely any kind of move. After falling sharply, it is showing a doji and trying to bounce back to the upside. It rallied through 103, and it broke through resistance at 100. It went back and tested 96-95 support. It rebounded but never made it through that prior high. It has rolled over now and it is testing just below a key support level. Now it will have to look at 90-92 as next support. In other words, it is trading right above a range of support, but it is struggling.

China is having issues and having to lower collateral rates and reserve rates, and it probably will have to do a few other things to keep its bubble economy going. We have Europe with its issues not wanting to buy as much, obviously. It does not have the manufacturing base. Even with the U.S. manufacturing base back on the expansion now, it is not enough to soak up all the oil. Particularly when we are selling oil down to the Gulf of Mexico from Oklahoma now. We actually have plenty for a change for a little while.

All of indices and all of the markets were impacted last week not based upon U.S. data, but based upon European and Chinese data. No longer do U.S. moves dominate the moves of all commodities. It used to be when the U.S. sneezed, the entire world shuddered. Now the U.S. is improving, but it has hardly any impact on commodities. Interesting.




TECHNICAL SUMMARY

INTERNALS

The internals were rather lackluster.

Breadth. NASDAQ, +1.3:1; NYSE, +1.6:1.

Volume. NASDAQ, +43.6%; NYSE, +48%.

Volume exploded higher on expiration Friday. Do you read anything into that? Of course not. It was expiration Friday, so volume means very little. The more interesting feature about volume is that it has tailed off dramatically since 2007. It is even lower now because there is no proprietary trading allowed. We have implemented rules that have basically taken liquidity out of the market. They are driving money to other markets around the world versus the U.S. systems. Can you believe that? It is our insane effort to regulate every possible aspect of the markets and to regulate areas that were regulated before but were not properly enforced. Now we have regulations to cover the regulations that are not enforced by the regulators.

Why we do not just fire the regulators that are not enforcing the laws in place, I do not know. That is not the way our Congress and federal government works, so now we have extra regulations. It is amazing. If you talk to money managers, Wall Street people, small businesses, and lenders, they all say that everything is drying up. We would prefer to regulate and push business overseas than to enforce less-stringent regulations that would make sure the marketplace was safe and bring the money back home. We are so stupid in the U.S. So stupid. Our leaders to not understand markets, and they think regulation is the answer.

You must have minimum regulations; there is no doubt about that. You have to ensure that the market is fair. That is what the Constitution is there for; it is there to ensure a fair, safe playing field. But if we do not follow the Constitution and go off the paper, we get away from having a fair, level playing field. If we do not follow the minimum regulations that we passed (and that worked), then we are not going to get the results we want. The answer is not putting more regulations on top of regulations. That never works. You cannot regulate fairness into free markets. You set up the minimum to ensure equal access, and then you should just let people go. Some will win and some will lose.

Inadvertently, through the will to do good by the people, we have driven money away and are drying up our markets. We gave away our IPO markets. There are more IPOs on other stock exchanges in other parts of the world than in the U.S. We used to be THE place, and now we have driven all that business away. We have regulated it away. Enough of that. You understand that that is why volumes have been so low. People complain of low volumes, but they have literally operated to dry them up. But I digress.


CHARTS

SP500. No volume, light volume, big volume on Friday. It was all expiration, however, so we will not read anything into it. I do want to note that for two days the index bounced up against the top of the eurozone (1225-1235) and failed to move through. It has come back. The question is whether it will fail and fall back into the range or if it will make a break to the upside. It has not answered that. I will tell you this: I said the important aspect was the test of the top of the range after it broke into it. Thus far it is failing the test. Two days of tapping at the resistance and falling back. It has not rolled over, and that is always a positive. This week will tell the tale. I do not like what I see here, and I will talk about that more when discussing leadership.


NASDAQ. NASDAQ is the same type of action, although it never threatened a break. It came closer on Friday; Thursday there was nothing. NASDAQ gapped higher, but it put no scare into 2600. On Friday NASDAQ rallied up to 2585. Getting closer at 15 points away. It put a little shiver into 2600, but then it immediately turned tail and headed back down off of those levels. It is not threatening it seriously, and it also has not made the break. It has made an attempt at it, but it has not been able to push through. That is something we have to watch next week. Will it roll over or will it pick itself back up and try to make the break once more? We will see. Thus far, it is not wowing anyone.


DJ30. The Dow was down on the session, but it held the 50 day EMA nicely. Showed a nice doji. It is in excellent shape to move higher.


SP600. SP600 was up on the session. Definitely a day for the growth indices. It was up but also finished well off its high. It is holding right above its August peak. That is good. It needs to be one of the leaders to the upside. This week will let us know if it will do that, along with the Dow, or if it will throw in with SP500 and NASDAQ if they cannot make it out of the range.


SOX. Semiconductors were up, but they were off their peak as well. Indeed, they were tapping at the interim highs from August and fading back. The chips tried to make the move, but they were not providing any help for the rest of the market. We still have the same old problem. The Dow and SP600 are holding above their range, and the NASDAQ and SP500 are unable to make the break thus far. This next week will tell the tale.


LEADERSHIP

I will be talking about two broad categories tonight. There are the stocks in position to move higher near term, and then we have longer term patterns that do not look so good. I will not go into detail on specific sectors; I want to go by individual stocks and comment on how they look.

AAPL is still in a good pattern overall. It is setting up a triangle in its trading range. GOOG is also looking decent overall. It is at the top of its range, trying to make a break to the upside. There are a multitude of other stocks I have discussed that have formed rounded bottoms and are trying to move back up. ARAY is one of these. AVY is another I have talked about quite a bit. TASR has rallied nicely and is testing as we speak. LNN is in a trading range. It looks like it wants to bounce back to the upside. PEET is in a very nice uptrend.

In short, there are stocks that have moved up and are still moving nicely higher. They are set up to do more upside work. Then there are those that have sold back but are making nice rounded bottoms and want to make the break to the upside. LII has a nice rounded bottom, breaking to the upside. Those can provide solid, near term upside for the market. If SP500 and NASDAQ want to make the break higher, they can provide the motors to do it. That is great. Near term I have always said there is a possibility for a rally to the end of the year and into the first of the year. A little January effect action.

We have stocks with the patterns to be the drivers for that move; we just need something to trigger the move. Good economic data was unable to do it this week. It tried to, but Thursday and Friday it did not have enough juice to break NASDAQ and SP500 higher. Maybe they can do it on their own patterns and the accumulation the January effect in the smaller stocks toward the end of the year. After all, SP600 is trying to be one of the leading indices along with the Dow.

At the same time, there are other stocks that are kind of scary when looking down the road. Looking at a two day chart of BRCM, over the early part of 2010 through the present it set up a big head and shoulders. And it is breaking lower. LRCX just announced an acquisition. From early 2010 to present it has set up a big head and shoulders, and it is trying to break lower. And it is not just semiconductors. ADSK has set up a similar head and shoulders and wants to break lower from the looks of it. In energy, APA is set up a head and shoulders. There are others. KO is not as severe, but it is putting in a rounded top starting this year. Look how it made a higher high in August and September but MACD made a lower high. It is trying to roll over. It has a very lethargic looking top setting up.

From 2010 to present UTX is setting up something of a head and shoulders top. FCX is setting up the same pattern. We are playing it to the downside now. You can see that head and shoulders top with the lower MACD. It is just struggling. CTXS looks like it is setting up and having trouble, wanting to roll over with a head and shoulders of its own. BEAM has that head and shoulders as well. Looks like it wants to break to the downside. Industrial metals are having the same issue. BHP is setting up that head and shoulders as well.

Near term we see the possibility of a move higher. But looking out to 2012, based upon the patterns that have set up over the last 18-22 months, we see a bunch of head and shoulders in some key names. Not all names, but some key names. That is worrisome. It does not mean the market will roll over, but it means there could be some problems in 2012. This is one reason that 2012 is bugging me. I have concerns about economic data sustaining itself and about what Europe and China will do to the attempted rebound in the U.S. I am worried. They could really have an impact on us, and Bernanke is worried about this as well. I guess I am not in great company. There are also the patterns that are disconcerting when they mesh with what you hear about economics. Stock markets look down the road, 9, 12, 15 months. That puts us well into 2012. These patterns could start breaking down before then. If that is the case, we could potentially have a not-great 2012. At least toward the back half of it.

We can play some of these to the downside. These are big moves. We will begin taking a look at these because some of them are breaking lower. We have positions in some of them, and we will be looking to take positions in others as they continue to set up and break down. We will be looking longer term, of course, but these are longer term patterns. We will mix them in with our short term.


THE MARKET

SENTIMENT INDICATORS

VIX. Volatility has fallen back down to the late-October levels. It is also sitting on top of the mid-June levels. As the market sold, volatility bounced around a bit, but it mainly came down. That is the opposite of what usually happens. When the market sells, volatility tends to run higher. When the market is rallying, volatility dries up until it gets to the point where it needs to break and move back to the upside. What we see now is an interesting situation. The SP500 and NASDAQ are trying to break back up out of the eurozone. It would suggest that they might fail in that effort because volatility has fallen back down to the complacent levels hit before when the market sold.

The market did not plummet back in late October when volatility hit this level and started to bounce. It sold sharply for a couple of days, but it recovered after that. Then when the markets sold off sharply in November, volatility did not spike to the moon. It was up but it did not do much. Indeed, toward the end of the month it fell. Volatility is not actually working the way one would anticipate. Can I necessarily say that because it is back down to the late-October level that the market will fail in its attempt to break out? No. I can suggest that there might be some trouble and some issues, but that does not mean it will fail. Indeed, it could be read to say it will continue to the upside. I will put it to you this way: Volatility is not tracking true with the market. There are times when it does and times when it does not. When it does not, do not spend too much time on it. Obviously I have already spent too much time on it tonight.

VIX: 24.29; -0.82
VXN: 23.48; -1.31
VXO: 25.02; -0.43

Put/Call Ratio (CBOE): 1.15; -0.11


Bulls versus Bears:

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

Bulls: 45.3% versus 47.4% and 44.2% prior. Faded as the market stumbles around at the top of the Eurozone range. Just as it was picking up some steam to the upside it slips, but nothing major here. 35% is the threshold measuring bullish versus bearish action. Six weeks the bulls were below bears. 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: 30.5% versus 29.5% versus 30.5%. Right back up as it appears 30% is going to be a support level. Makes sense given the market chop now. The index spent seven weeks over the 35% threshold considered a bullish indicator. 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: +14.32 points (+0.56%) to close at 2555.33
Volume: 2.487B (+43.67%)

Up Volume: 1.52B (+715.97M)
Down Volume: 1.1B (+240.05M)

A/D and Hi/Lo: Advancers led 1.28 to 1
Previous Session: Advancers led 1.36 to 1

New Highs: 37 (+15)
New Lows: 120 (+6)


SP500/NYSE

Stats: +3.91 points (+0.32%) to close at 1219.66
NYSE Volume: 1.139B (+48.31%)

Up Volume: 3.16B (+790M)
Down Volume: 1.69B (+280M)

A/D and Hi/Lo: Advancers led 1.62 to 1
Previous Session: Advancers led 1.71 to 1

New Highs: 86 (+26)
New Lows: 55 (-5)


DJ30

Stats: -2.42 points (-0.02%) to close at 11866.39
Volume DJ30: 389M shares Friday versus 137M shares Thursday.


MONDAY

Next week there is another calendar full of economic data. It begins with Housing Starts on Tuesday. That is when the serious news hits. Existing Home Sales are on Wednesday. On Thursday you have Jobless Claims and then the third estimate of Q3 GDP. Michigan Sentiment is also on Thursday along with Leading Economic Indicators. Friday brings Durable Goods, Personal Income and Spending, and New Home Sales. Plenty to chew on next week as SP500 and the NASDAQ try to break out of their eurozone ranges.

As I discussed earlier, all eyes will be on the SP500 large caps and the biggest NASDAQ stocks as they bump their heads at the top of the eurozone trading range. Will they make the break or not? I still believe there are enough short term, bullish patterns out there ready to move higher. I believe they can indeed drive those indices up out of this range for now. I am not saying they will break out to a new high. They could drive them out. We have put in one higher low. We could put in another higher low, make the break, and come up and test these April into July highs. I do not think we will break those. I think that will be the zenith on the move. We may break them. We may move through them on a short term basis, but I believe that would be the reversal signal.

This is just my analysis; it does not mean it will happen. But this is what I have seen in 25 years of looking at the stock market. This is the kind of thing that happens. We have the economics, we have the patterns near term and long term, and we have problems in the rest of the world. I have seen it happen in different parts here and there, but now they are all put together at once. These are truly historic times. It kind of sucks to be here, but it is interesting at the same time. When I ponder these things and get concerned, I am often reminded of what Gandalf the Grey said in The Lord of the Rings. Everyone living through times such as these sometimes wishes it was not their burden. But it also makes the decisions pretty simple. It is not worrying about whether you are here or not. You ARE here. It is about what you decide to do with the time you are given. That is one very eloquent way of saying, "When life gives you lemons, make lemonade." Or in my neck of the woods, "Take what the markets give you."

We get our edge by making money off the market whether it goes up or down. We gain the edge so we do not have to care. We ultimately do care, but you understand why I say I cannot care when I am trading the market. We just look for what the market will give us. Short term it looks like it will give us some upside plays. After that, it looks like it will give us some long downside plays, punctuated by sharp moves to the upside, of course. That is the way it always is. Underlying all of that, we just look at what the market is doing. Look at the plays. Do we have a good probability of making money on this play? Do we have at least 3:1 odds in our favor of going in the direction we are looking at? If we can get 3:1 or better and we are playing smart with the direction of the market overall, we end up winning and making a lot of money.

Just be smart and do not get too caught up with all the noise and all the predictions about what will happen. It is the end of the year, and there will be a lot of predictions. Do not get too caught up in that. Look at what the market is doing now and overlay that with what is setting up down the road. Just like what I went through tonight. If you do that, you are less likely to be caught by surprise and get that one in your ear, as Shoeless Joe Jackson admonished the young Moonlight Graham in Field of Dreams. If we do that, we will not get caught behind the trend, or we will not get to the point where we are getting killed. We can stay ahead. We can make great money just allocating common-sense money to each play and then making sure each play has the requisite risk/reward. If we do that and keep our eye on the horizon, we will be in great shape no matter what the market and the economy throws at us.

Have a great weekend. Do some more Christmas shopping. Maybe do some more hunting; it is still hunting season after all. Drink some great wine or whatever it is you like to do. Whatever your beliefs are, try to enjoy the season. Enjoy the benefits of the hard work we have put in this year. It has been a difficult year from an up and down standpoint, but it has been a very profitable year as well. Enjoy it. Smell some roses and spend some of that money; maybe it will help the economy. I will see you on Monday.

Have a great weekend!



Support and Resistance

NASDAQ: Closed at 2555.33

Resistance:
2555 is the mid-August 2011 peak
2572 is the November 2-11 gap down point
2580 is the November 2010 closing high
2593 is the November intraday high
The 50 day EMA at 2596
2599 is the June 2011 low
2603 is the March 2011 intraday low (post-Japan low)
2612 is the late August 2011 peak
2643 is the September 2011 high
2645-2650ish from December 2010 consolidation
The 200 day SMA at 2665
2676 is the January 2010 low
2686 is the January 2011 closing low
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
2754 is the recent October 2011 high
2759 is the mid-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:
2546 is the early September 2011 gap down point
2535 is the November island reversal gap point
2532 is the early August 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 1219.66
Resistance:
1220 is the April 2010 peak
The 50 day EMA at 1224
1227 is the November 2010 peak
1231 is the late August 2011 peak
1235 is the mid-December 2010 consolidation low
1249 is the March 2011 low (post-Japan)
1255 is the late December 2010 consolidation range
1258 is June 2011 intraday low
The 200 day SMA at 1261
1275 is the January 2010 low, early January 2011 peak
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:
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
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 11,866.39
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 11,939
12,094 is the April 2011 low
12,110 from the March 2007 closing low
12,284 is the October 2011 peak
12,391 is the February 2011 peak
12,754 is the July intraday peak
12,876 is the May high
13,058 from the May 2008 peak on that bounce in the selling

Support:
The 50 day EMA at 11,792
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
11,555 is the March low
11,452 is the November 2010 peak
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

December 12 - Monday
Treasury Budget, November (14:00): -$137.3 actual versus -$139.5B expected, -$150.4B prior

December 13 - Tuesday
Retail Sales, November (8:30): 0.2% actual versus 0.6% expected, 0.6% prior (revised from 0.5%)
Retail Sales ex-auto, November (8:30): 0.2% actual versus 0.5% expected, 0.6% prior
Business Inventories, October (10:00): 0.8% actual versus 0.9% expected, 0.0% prior
FOMC Rate Decision, December (14:15): 0.25% actual versus 0.25% expected, 0.25% prior

December 14 - Wednesday
MBA Mortgage Index, 12/10 (7:00): 4.1% actual versus 12.8% prior
Export Prices ex-ag., November (8:30): -0.1% actual versus -1.5% prior
Import Prices, November (8:30): 0.7%
Import Prices ex-oil, November (8:30): -0.2% actual versus -0.2% prior
Crude Inventories, 12/10 (10:30): -1.932M actual versus 1.336M prior

December 15 - Thursday
Initial Claims, 12/10 (8:30): 366K actual versus 390K expected, 385K prior (revised from 381K)
Continuing Claims, 12/03 (8:30): 3603K actual versus 3650K expected, 3599K prior (revised from 3583K)
PPI, November (8:30): 0.3% actual versus 0.1% expected, -0.3% prior
Core PPI, November (8:30): 0.1% actual versus 0.1% expected, 0.0% prior
Empire Manufacturing, December (8:30): 9.53 actual versus 3.0 expected, 0.61 prior
Current Account Balance, Q3 (8:30): -$110.3B actual versus -$110.0B expected, -$118.0B prior
Net Long-Term TIC Fl, October (9:00): $4.8B actual versus $68.3B prior (revised from $68.6B)
Industrial Production, November (9:15): -0.2% actual versus 0.2% expected, 0.7% prior
Capacity Utilization, November (9:15): 77.8% actual versus 77.8% expected, 78.0% prior (revised from 77.8%)
Philadelphia Fed, December (10:00): 10.3 actual versus 4.5 expected, 3.60 prior

December 16 - Friday
CPI, November (8:30): 0.0% actual versus 0.1% expected, -0.1% prior
Core CPI, November (8:30): 0.2% actual versus 0.1% expected, 0.1% prior

December 19 - Monday
NAHB Housing Market Index, December (10:00): 19 expected, 20 prior

December 20 - Tuesday
Housing Starts, November (8:30): 627K expected, 628K prior
Building Permits, November (8:30): 633K expected, 653K prior

December 21 - Wednesday
MBA Mortgage Index, 12/17 (7:00): 4.1% prior
Existing Home Sales, November (10:00): 5.03M expected, 4.97M prior
Crude Inventories, 12/17 (10:30): -1.932M prior

December 22 - Thursday
Initial Claims, 12/17 (8:30): 380K expected, 366K prior
Continuing Claims, 12/10 (8:30): 3650K expected, 3603K prior
GDP - Third Estimate, Q3 (8:30): 2.0% expected, 2.0% prior
GDP Deflator - Q3 (8:30): 2.5% expected, 2.5% prior
Michigan Sentiment - Final, December (9:55): 68.0 expected, 67.7 prior
Leading Indicators, November (10:00): 0.3% expected, 0.9% prior
FHFA Housing Price Index, October (10:00): -0.1% prior

December 23 - Friday
Durable Orders, November (8:30): 2.0% expected, -0.5% prior (revised from -0.7%)
Durable Goods Orders, December (8:30): 0.3% expected, 1.1% prior (revised from 0.7%)
Personal Income, November (8:30): 0.2% expected, 0.4% prior
Personal Spending, November (8:30): 0.3% expected, 0.1% prior
PCE Prices - Core, November (8:30): 0.1% expected, 0.1% prior
New Home Sales, November (10:00): 313K expected, 307K 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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