Sunday, December 04, 2011

Stocks Rally, But Trade Went Flat


- Stocks initially rally on Europe, jobs report, but by session's end the trade went flat.
- Jobs are slowly following the economic improvement higher.
- Jobs report appears better but more people left the workforce than found jobs.
- Near term the European bid is a positive, but some head and shoulders patterns are not pleasing for the upside longer term.

Jobs report is heartening but not and stocks rally but not.

It was jobs Friday, and that means all eyes were on the monthly jobs report. It is important to note that the jobs report was not necessarily the driver on the day. Early on, stocks were higher. It was not because of the jobs report as futures were up before the report came out. There was news out of Europe that a scheme had been derived whereby central banks could make an end run around the constitutions that were blocking direct central bank aid to those countries needing help. The plan is basically that central banks would loan to the IMF, and then the IMF would generously turn around and give the money to those countries in need of assistance.

Nothing like a good, old-fashioned socialist end run around constitutional law to pump the markets up. Of course the markets do not care if it is constitutional or not. The markets care if there is liquidity. Markets care if there is money to invest in financial instruments and debt instruments and thus drive them higher. When that happens and the perception is that the money is there or on the way, stocks are going to trade higher. That is exactly what they were doing. When it hit 8:30 EST, there was a surge to the upside. Then there was an "I am not sure what the heck it all meant" pullback. That was on the jobs report.

Depending on what side of the fence you are on, or whether you are just a person who listens to rational thought and facts, you had a different opinion about what the jobs report meant. I am not going to tell you exactly what it is, although I am sure you already know what the numbers were at this point. The stocks shot up, looking good at first, and then stocks pulled back all session. The Dow was up over 100 points. By the end of the day, however, it closed flat.

SP500, -0.2%; NASDAQ, +0.03%; Dow, -0.01%; SP600, +0.341%; SOX, -0.2%

Flat as a pancake. Could not go anywhere and did not want to. Stocks were just lethargic. That is totally understandable given what stocks have done on the week. This was huge week. At one point, when the Dow was up over 120 points, it had logged the best week it had ever logged in a points term. But it could not hold the move, and they faded back to flat as you can see by the tombstone doji on SP500.

It was not the best week ever, but it was a doggone good week. Stocks were just a bit tired after breaking back out of the August-October trading range. Of course there are some burrs under the saddle, so to speak. SP500 tried the June low but could not break through. It was not a clear breakout. Let's face it, after such a huge run and then bumping up against resistance, you cannot expect them to make a break at the end of the week. Especially with a jobs report that was not that great, despite the headlines and despite trumpeting from certain sectors of the government.


I have talked a lot about it, and I guess we have to hit that news and hit it hard. The jobs number is not that great on the headline. It was 120K versus 123K expected, but there were great revisions for September and October. September was revised up 52K. October was revised up 20K, pushing that to 100K. Overall with the revisions, it was not that bad. It is averaging 132K per month for the year, and that is right where you need to keep up with population increases and people just coming out of school.

So are we there? No, we are obviously not there. But the headline was the unemployment rate. It tumbled to 8.6% from 9% when, of course, 9% was expected. Holy cow. What is going on? The last time it was at this 8.6 level was March of 2009. Surely the economy is starting to really hum. You would expect employment to pick up after three months of improvement in economic data. That is exactly what has been occurring. But it is not worth 0.4% on the unemployment number. What is going on? It is going to take awhile to explain, but stick with me.

Overall, unemployment fell 600K to 13.3M. Those who have been unemployed over six months were 5.7M. That was a decline as well. Sounds pretty good, but the workforce fell 315K jobs. That means basically those people who have not looked for work for four weeks are not counted. Who has not been looking for work for four weeks? Those are the people who have run out of unemployment benefits. As soon as they run out of those benefits they quit going through the motions of saying "I am looking," and they just give up. There are no jobs out there, and they go away. That was the lowest level since January. In other words, that is it biggest drop since January as far as the workforce goes. Again, 315K people.

One of the problems is that 6.6M people are not in the workforce but actually want work. This kind of gets hard to get your hands around and maybe your head as well. There are now more people out of work and without benefits (by the tune of 700K) than there were at the same time last year. Even though there is supposedly improvement, more people are out of work and without benefits right now. Indeed, the share of industries that are adding jobs fell to 54.7%. That is the lowest in a year. The average time for being unemployed rose to an all-time high. Those are not great numbers, and at least half of the decline in the unemployment rate was caused simply by people dying or giving up and leaving the workforce. This is the strange feature that we have to deal with right now.

Typically when the economy improves and jobs start to improve, we get a spike in the unemployment rate. Just trust me when I say that it is true. The people who have been out of the market, those that we are seeing leave see that the economy is getting better. They either sense it or see people getting jobs or they hear it on the news. Then they go back and look for work. Those that disappeared off of the rolls and are no longer participating in the job search suddenly show back up. Employers tend to lag the rest of the economy. They do not want to hire until they absolutely have to hire. Then they pull the trigger and start hiring those people. The initial surge of those who came back in but could not find a job (thus the spike the unemployment rate) are hired, and then the unemployment rate drops. That happens right at the turn of the economy, of course. Things get better and people come back in. They sense it is better, but the jobs are not there jet. The unemployment rate spikes, and then it starts to go down because businesses have to hire at that point. But we have never had the spike in unemployment. We have had unemployment at 9% or more for years now.

I am borrowing from Investor's Business Daily. In 2009, unemployment spiked above 9%, and it has stayed until just the last month. We have had years of high unemployment. What has happened? There has been no big surge at the end of the recession. You have a surge at the beginning when everyone gets laid off, and then there is a surge at the end when people come back to look before the jobs are really there. What has happened instead this time, with this protracted level of 9%+ unemployment, the workforce has atrophied and withered away. There is no spike in employment, just another dousing to the labor force.

Let us think about that. When to employers hire? When they absolutely have to. They have been burned having people on when the economy fell. You typically see certain things happen. You see average hours worked jump because they have to get more and more productivity out of the workers that are there. They do not want to hire yet. Business gets better and better, so they push those people more and more. They make them work more hours, until they say "If you do not pay me more or get someone else, I'm out of here." Look what is happening: The average workweek is flat at 34.3. It even fell three weeks ago. Hourly earnings were down 0.1%. They were expected to rise 0.2%. They are not working more, and they are not paying people more. They are obviously not overtaxed. These are problems with this report.

I do not mean to say things are not getting better. No doubt that there are more jobs out there. There is some hiring going on, but it is not a boom in hiring. It is not enough to account for a 0.4% drop in the unemployment rate. It looks like we have some funky and downright strange monkeying around with the numbers. There is reason to account for a drop, but it looks as if there is overreaching. They are factoring in too much, and the problem is they are government numbers. If an administration wants to fudge, they can. I do not care if it is Democrat or Republican. These guys are starved for some good news, and I think they are overplaying their hand. As I said, the fall in people saying they found work would account for a bit more than half of the decline in the jobs number. That would have reduced it, but there is way too much of a decline for what the numbers show. They do not real tell a story.

While there has obviously been improvement in the economy over the last three months, it is not to this extent. The numbers themselves show there are reasons for the fall. Things are really not a lot better than they were with more people out of work and without benefits then there were a year ago. We still have problems even though things are turning, but let us be positive. We need some positive news in this country. There are way too many people still out of work. Even looking at the U6, which was down to 15.6M from 16.2M people, that is still unbelievably too many. It is terrible. We have to get business going.

This idea of 99% and 1% is a serious problem we have to deal with. I was discussing this with several people and small business leaders in the area, and they said they see nothing wrong with someone saying "I want what you have" if they start a business or get a job and work their rears off to get it. Instead, we have people saying "I want what you have, and I am going to petition the government to take from you what you have worked for so they can give it to me." That, I am afraid, is the huge difference we have today versus pretty much the entirety of this country's history.

Just look at the entitlement programs. I heard one fellow last night discussing it, and he said really we have $100T in debt when you factor in all the entitlements and liabilities. It is not what you can do for your country, but what the heck can my country give to me. And if they have to take it from someone else to do so, that is fine. But here is the sad truth. They could confiscate all of the wealth in this country all of the profits from the Fortune 500 companies, and they could tax the rich people all they want and more, and still they would never pay our entitlements. They would never pay it down.

The only thing we can do is stop and come up with different ways to fund these liabilities. With respect to Social Security, Medicare, and even Medicaid, that is ultimately what we will have to do. We have to change the game for people who are coming up into the system. Those who we made promises to and who have paid in and cannot change, we have to take care of them. But for those who are coming up through the system, we have to change it. The numbers do not work. The math is not there. We live longer than we did when the system was designed. You had to cheat death for two years to collect any Social Security. Now we have to change it. The question is whether we are smart enough to do that. We have a lot of people who want to spread misinformation about any possible change being the end of our country. If we do NOT change, that will undoubtedly mean the end of our country.


The news impacted the other markets as well. It was the European news that really had the anticipated effect on our bonds and dollar. It did not hurt that the jobs report was a bit better. But our debt instruments and our currency reacted inversely to what they should have on a stronger U.S. economy. That tells you something else about the impact of that jobs report and what it really meant on Friday.

Dollar: 1.3405 versus 1.3464 euro. The dollar was up against the euro, but it was down against just about everything else. A stronger jobs report should have seen a stronger dollar. It did not. The dollar is not in danger right now, much to the chagrin of the administration and the Fed that want to inflate our way out of this. Because there are other issues in the world, people are still hanging onto dollars versus Euros.

Bonds: 2.05% versus 2.09% 10 year U.S. Treasury. Bonds rallied. The 10 year moved up and drove rates down. Bonds should have sold and rates should have rallied on a strong jobs report with a good news situation for the U.S. That was not the case. People were buying U.S. bonds. Bonds are bouncing off the 50 day EMA, continuing their rally off of the July low.

Gold: 1,749.40, +9.60. Gold closed slightly higher. It rallied more intraday and backed off toward the close. Still in its triangle and still trying to look for a new breakout to the upside.

Oil: 100.94, +0.74. Oil closed up. It is still having trouble putting mileage on that 100 level. It broke through it, it fell back to 95, and it has kind of melted higher since. I do not think it will have many issues moving forward. But with China this week having its PMI starting to contract (that is its factory output) and then lowering reserve requirements on its banks to reliquify its economy, oil has a bit of a pause. It is worried about China being able to suck up all that excess oil in the world. Oil did not just blast off once more. But again, I do not think it is really in trouble.



Breadth. Advancers led 1.5:1 on NASDAQ and 1.5:1 on the NYSE.

Volume. Volume fell 10% to a measly 1.6B shares on NASDAQ. It rose 4% on the NYSE to 815M, but that was rather pathetic and well below average as well.


SP500. A broader top set in to start this year. A head and shoulders with the crash into July and August. A recovery and now struggling. This week was a good week for the SP500. It moved up to the March and June lows, but it could not punch through. It tried to do so on Friday, but it was not the day. It got thrust back, showing a tombstone doji at the top of this range. Despite the great week, that tombstone doji suggests there may be a fall back. The jobs report did not instill a lot of excitement on Friday, but maybe the market was just tired. It is at a critical level. It broke down from that head and shoulders. It rebounded, sold, and it made a higher low. Now it has to prove itself once more. We will have to see.

It is in a range, no doubt. It may be over the August-October range, but it has not broken back up through this key level. It did so once, but it could not hold the move. Now it looks like it might falter below that. We will have to see how it plays out. The bid from Europe will play a big role in the weeks to come. If it is still there, if the market still perceives more money is coming, the bid will remain and stocks should rise. After all, they love liquidity and they love handouts. As long as it is on this side of the ocean or on the continent side of the ocean, stocks will love it. But they will have to come up with something, and Friday it was not enough. They had another inkling of what was to come, but it was not enough to keep stocks moving to the upside.

NASDAQ. NASDAQ posted no gain. It gapped higher, closed flat. It is still above its June peak, so it has a little momentum. Really it has not had a breakaway move from the August-October range. The jury is out on it as well. It gapped and reversed. That is not necessarily great action, but it was on low volume at the end of the week of a strong move higher. It really was not in the mood to go anywhere. But as with SP500, it had that head and shoulders, the break down, and now it is coming up to test again. We will just have to see what happens. Again, if the bid remains thanks to European influences (or, more correctly, European liquidity), NASDAQ should find a bid and resume the move to the upside.

SP600. The small caps posted the best gain of the day, but they are still below their March and June lows, showing a doji just as SP500 did. Showing it right below the 200 day EMA as well as that late-October peak which was the recovery peak off of that sharp selling into early October. The small caps have something to prove as well. They have to get through this level. But after such a big move, they can afford to come back, test a little bit, and then make the next break to the upside. We will see if that comes true. If the economic data continues to improve and we get that liquidity, it should not be a problem.

SOX. Semiconductors broke through that downtrend off of the February peak, but they could not hold it into the close. Again they are suffering from the same problems as the rest of the indices. That was just a doggone good week that took it up to resistance. Now maybe it will have to rest a bit before it makes the break through.


I need to go through a lot of sectors and will show you a lot of charts. They are not representative of every stock in the market. There are still stocks that are in great shape. Oh, look at all the foreshadowing. But these are worrisome.

Semiconductors. Remember that the semiconductors are a leadership index. They tend to move higher before the rest of the market and lower before the rest of the market. That is because chips are in everything. If there will be an economic recovery, they will see it first. That is exactly what happened in 2008. They bottomed in Q4 and rallied. Then when everything else hit the lows in March, they were just making a higher low. They were off to the races, and this has happened so many times. It happened out of the 2000 recession. It has happened in pretty much every recession I have been through. I have played the chips as the leader out of that recession. It is really cool. I love it. They led out of this one, but they also led to the downside.

What have they formed here? You can see a pretty good head and shoulders has set up in the SOX. Looking at the SMH, that head and shoulders is pattern shaping up. Looking at individual semiconductors, you can also see the head and shoulders. BRCM has a broad top and a breakdown recently. Now it is coming up to test the bottom of that breakdown. Longer term, BRCM looks really weak. LRCX has also put in this big head and shoulders dating back to early 2010. Am I scaring you yet? That is not the intention. I just want to point things out. There are problems that will have to be dealt with.

Industrial. Industrials are always important. This is one of the areas that have been doing really well. We have had the export economy under President Obama. These are the big companies that have been performing very well. GE may be in a trading range. It could be setting up a head and shoulders of its own. That is not that clear. Let us look a little deeper. CAT looks like a real topping pattern. Big run. Look at the three highs, and a lower high in the selloff. The first really major correction since the low in March of 2009. Now it has returned back up to the bottom of that trading range.

It does not look that great. Are there worse patterns? Look at IR. It is a big manufacturing company. It has a head and shoulders with a really wimpy shoulder. It has moved up recently, sure, but it is very worrisome longer term. HON has been a leader. Its stock pattern matches that of the indices. We will see what happens. It looks to be running out of some juice, although it still has a little power. HUN is big into chemicals. A head and shoulders. ASH is another big chemical company. It has a very rounded top. Note this second peak in the middle of 2011. MACD is lower. It is running out of steam, or so it appears to be longer term.

Energy. BTU has a head and shoulders. HAL should be doing great, but it has kind of a toppy pattern. It broke sharply lower, a lower high. Looks to be struggling. SLB is a very similar pattern.

China. SINA peaked and it is breaking down. Of course we have been playing it to the downside. CTRP is a Chinese stock that we love to play. It put in that broad top and has rolled over.

Technology. Some technology stocks are having problems. We have a play on NTGR, but it is longer term trying to set up a head and shoulders. As an aside, just because they have longer-term issues does not mean we cannot play them short term to the upside. What do we know about head and shoulders? They do not always consummate. But this is just worrisome. I am drawing attention to it because you have to stay ahead of the game.

ORCL set up a head and shoulders this year. It sold off, and now it is making a lower high. That does not mean it is not going to bounce back up. We just need to watch it. CA has that big head and shoulders forming up.

Shipping. TK, an important transportation company, is setting up that long term, two-year head and shoulders top.

Metals. FCX has that big, rounded top. It is making a right shoulder right now. It was a long left shoulder, and the right shoulder may also take awhile to consummate. It is setting up. Looking at the Copper index overall, it has the same kind of big head and shoulders pattern. There is a big top in Steel and Iron. It never even made it back to the prior high before kind of rolling over.

Grains/Foods. Grains are a problem as well. CORN has a head and shoulders. That seems weird. If we are recovering and the world is growing, we should need corn. Why would corn prices look to be rolling over? The cotton index, BAL, had a huge rally in 2010. It looks to have peaked out, forming its head and shoulders as well. For those that love their morning cup of joe, JO looks as if it has peaked and rolled over after a big rally as well.

It is not as severe. This is just in 2011. A lot of these other patterns are spanning two years. The SOX is a two-year span. It had that big run on the initial Quantitative Easing, and then it had a pause. It had a run on the second Quantitative Easing, but it looks like it is ready to roll over. If we do not get another round of Quantitative Easing or some kind of stimulus or financial liquidity over in Europe, we might see this roll over.

I guarantee you the central banks and our Fed are watching all of these charts. They are not so pronounced on our indices, but they are still there. Never recaptured the 2008 high, and they have this rollover look to them. The SP500 has it. NASDAQ has it, too, although it did manage to take out the 2008 high. The small caps look better. They took out the high, but they are still struggling. Small caps need to be leading the way if there is to be a real economic recovery in the U.S.

I point these out not to say the world is ending and we should all run into a cave right now. I point it out to show you that we are not as strong as some are saying. We are supposedly recovering from the Great Recession and have turned the corner. In the U.S, some say how strong we are every morning on the financial stations. Maybe we look strong relative to a bunch of the European countries, but we are not strong in the way of leading the world like we used to be. Not even close. We have to be concerned that we are getting a head fake. We have to watch out for that one "in your ear" as Shoeless Joe Jackson warned Moonlight Graham in "Field of Dreams."

We could be setting up for the one in our ear. We are being told everything is recovering. We are being told that the central banks have it under control and will make things work. But that may not be the case. The patterns are worrisome; something nefarious this way comes (sorry Ray Bradbury). There could be problems if some more liquidity is not pumped into the markets. Every time Alan Greenspan saw this set up, he knew he had to pump in more liquidity. But all that has done is build a house of cards bigger and bigger, or inflated the bubble more and more. Eventually it has to pop or be deflated. That is what worries me. I have looked at a large cross section of stocks and materials, and there are similar patterns setting up.

Retail. Retail stocks are still performing very well. RL continues to move higher. VFC continues to move higher. PVH is still moving to the upside, and BBBY is still moving to the upside. It is hard to argue with those and I am not arguing. The consumer is spending, and that may lead the world out of trouble. I will not write that off. I am just saying we have to be careful looking ahead while we are trading, investing, and moving in on our position plays. We just have to keep this in mind and know that it is out there.

If it starts to come together, we need to be ready. That is all we ever do; it is nothing new. It is just another part of our job to keep you informed and for you to keep yourself informed as we move forward. Just know the big patterns, the overlays, as we trade in a day-to-day, week-to-week, and month-to-month basis. If you do that, you will stay out of trouble. You know what is coming, but do not let it totally color your short-term actions so that you think everything will fall.

Take what the market gives. If you have good upside setups as we have had, you take them. Maybe it is in a context of an overall top that ultimately breaks down. That does not mean we cannot make money then.



VIX: 27.52; +0.11
VXN: 27.69; +0.49
VXO: 27.93; +0.25

Put/Call Ratio (CBOE): 0.98; +0.04

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: 44.2% versus 47.4% versus 44.2%. Right back down to the level hit three weeks back though still well above 35%. 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 32.6% versus 34.7%. Unlike bulls that backed off, bears continued their more bullish stance as they became more endangered. The index did spend 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.



Stats: +0.73 points (+0.03%) to close at 2626.93
Volume: 1.634B (-10.02%)

Up Volume: 769.11M (-280.89M)
Down Volume: 876.4M (+116.6M)

A/D and Hi/Lo: Advancers led 1.52 to 1
Previous Session: Decliners led 1.71 to 1

New Highs: 44 (+3)
New Lows: 41 (-17)





Stats: -0.3 points (-0.02%) to close at 1244.28
NYSE Volume: 815M (+4.09%)

Up Volume: 2.49B (+820M)
Down Volume: 1.58B (-410M)

A/D and Hi/Lo: Advancers led 1.56 to 1
Previous Session: Decliners led 1.56 to 1

New Highs: 121 (+1)
New Lows: 11 (-4)




Stats: -0.61 points (-0.01%) to close at 12019.42
Volume DJ30: 150M shares Friday versus 144M shares Thursday.



Now that we have the jobs report out of the way, we still have plenty of economic data. There are Factory Orders, ISM Services, and then Initial Jobless Claims, of course. It will be interesting to see how Wholesale Inventories are shaping up ahead of the holidays. Then we finish the week with the first look at the Michigan Sentiment for December.

That is all well and good, but what will rule the roost? It will be what is happening in Europe. Why? The jobs report did not light any fires in the U.S. on Friday. It may be that the market was a bit tired, but it is also at resistance. The jobs report was not that great. It is just following a lukewarm recovery in the U.S. While the recovery is nice, the ECRI still says it will not prevent a recession in 2012. That ties in somewhat to those longer-term head and shoulders charts.

The SP500 is below the March and June lows. It is showing a doji after a nice week. Can it continue? We will find out. We have a lot of great upside setups. We also see a lot of downside setups, and it is somewhat worrisome. As a matter of fact, we will probably put on another play on the SDS or the SPY because of this pattern. We had a sharp selloff, we had a rebound to a lower high right below important resistance. There was a fade, and then a rebound to a lower high right below an important resistance. We may be range-bound again, but we will have to let it show us what it will do. We will be ready either way. That means we have to be ready on the positions we took to the upside. If we get back down in the range and want to turn around, we will kill them, go downside, and make some money.

If we are range-bound, so be it. If we are not, so be it. The bid is the key. Will the EU, the individual countries, the IMF, the ECB, and even the U.S. Fed keep that bid under Europe and thus the bid under the U.S? The Federal Reserve here does not want to go on QE3 if it can avoid it. It may accomplish its goals by Europe inflating its currency and financial markets, and thus dragging us along with it. After all, as we saw in July and August, it was Europe pulling us down. If it can inflate their asset prices and pull us up, too, it will do whatever it can to help short of out-and-out lending money to the EU.

Given the mindset of the Ben Bernanke Fed and the change in the ECB with the change in leadership from Mr. Trichet, I think we could very well maintain that bid and continue to the upside. That is what I expect to happen, but my expectations will not tell the market what to do. We simply have to be ready. While I expect Europe to continue to come out with clever plans to form some kind of Quantitative Easing, we just have to be ready in case things turn ugly after a fantastic week in the U.S. stock market.

I will see you on Monday. Have an outstanding weekend!

Support and Resistance

NASDAQ: Closed at 2626.93

2643 is the September 2011 high
2645-2650ish from December 2010 consolidation
The 200 day SMA at 2674
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

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
The 50 day EMA at 2593
2580 is the November 2010 closing high
2572 is the November 2-11 gap down point
2555 is the mid-August 2011 peak
2546 is the early September 2011 gap down point
2535 is the November gap down 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 1244.28
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 1265
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

1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
The 50 day EMA at 1218
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 12,019.42
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

The 200 day SMA at 11,946
The June low at 11,897 (closing)
11,893 from March 2008 closing low
11,867 from the August 2009 high and peak on that bounce in the selling.
11,734 from 11-98 peak
11,717 is the late August 2011 peak
The August low at 11,702
The 50 day EMA at 11,688
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

November 28 - Monday
New Home Sales, October (10:00): 307K actual versus 312K expected, 303K prior (revised from 313K)

November 29 - Tuesday
Case-Shiller 20-city, September (9:00): -3.6% actual versus -3.0% expected, -3.80% prior
Consumer Confidence, November (10:00): 56.0 actual versus 42.5 expected, 40.9 prior (revised from 39.8)
FHFA Housing Price Index, September (10:00): +0.9% actual versus -0.1% prior

November 30 - Wednesday
MBA Mortgage Index, 11/26 (7:00): -11.7% actual versus -1.2% prior
Challenger Job Cuts, November (7:30): -12.8% actual versus 12.6% prior
ADP Employment Change, November (8:15): 206K actual versus 125K expected, 130K prior (revised from 110K)
Productivity-2nd Rev., Q3 (8:30): 2.3% actual versus 2.6% expected, 3.1% prior
Unit Labor Costs, Q3 (8:30): -2.5% actual versus -2.1% expected, -2.4% prior
Chicago PMI, November (9:45): 62.6 actual versus 57.5 expected, 58.4 prior
Pending Home Sales, October (10:00): 10.4% actual versus 0.1% expected, -4.60% prior
Crude Inventories, 11/26 (10:30): 3.932M actual versus -6.219M prior

December 1 - Thursday
Initial Claims, 11/26 (8:30): 402K actual versus 390K expected, 396K prior (revised from 393K)
Continuing Claims, 11/19 (8:30): 3740K actual versus 3650K expected, 3705K prior (revised from 3691K)
ISM Index, November (10:00): 52.7 actual versus 51.0 expected, 50.8 prior
Construction Spending, October (10:00): 0.8% actual versus 0.3% expected, 0.2% prior
Auto Sales, December (15:00): 4.27M prior
Truck Sales, December (15:00): 5.84M prior

December 2 - Friday
Nonfarm Payrolls, November (8:30): 120K actual versus 123K expected, 100K prior (revised from 80K)
Nonfarm Private Payr, November (8:30): 140K actual versus 141K expected, 117K prior (revised from 104K)
Unemployment Rate, November (8:30): 8.6% actual versus 9.0% expected, 9.0% prior
Hourly Earnings, November (8:30): -0.1% actual versus 0.2% expected, 0.2% prior
Average Workweek, November (8:30): 34.3 actual versus 34.3 expected, 34.3 prior

December 5 - Monday
Factory Orders, October (10:00): -0.4% expected, 0.3% prior
ISM Services, November (10:00): 53.4 expected, 52.9 prior

December 7 - Wednesday
MBA Mortgage Index, 12/03 (7:00): -11.7% prior
Crude Inventories, 12/03 (10:30): 3.932M prior
Consumer Credit, October (15:00): $7.0B expected, $7.4B prior

December 8 - Thursday
Initial Claims, 12/03 (8:30): 395K expected, 402K prior
Continuing Claims, 11/26 (8:30): 3700K expected, 3740K prior
Wholesale Inventories, October (10:00): 0.2% expected, -0.1% prior

December 9 - Friday
Trade Balance, October (8:30): -$44.0B expected, -$43.1B prior
Michigan Sentiment, December, Preliminary (9:55): 65.0 expected, 64.1 prior

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

Jon Johnson is the Editor of The Daily at

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