Jobs are Decent, Stocks Bounce

SUMMARY:

- Jobs are decent, stocks bounce, but the indices are still below the recent peaks.
- Some stocks continue to look super, and others bounced back but look a lot like mere relief bounces.
- Jobs continue to improve but the best jobs are 50% temporary, job quality and pay has degraded, long-term unemployment is still incredibly high, and another 10 years is needed at this rate to get back to even.
- January Trade Deficit jumps to the highest in 3+ years. That is not a bad thing.
- Economy at escape velocity? Does the jobs report scuttle any vestiges of a QE3? ECRI versus areas of economic improvement.
- Friday did not answer the rally or correction question, but it sure left the table set for this week to try and formulate an answer.
- Many more downside setups, but good stocks continue running and there are more than a few upside setups as well.

Stocks bounce on jobs report but don't surge. Don't turn and sell off either.

Friday brought the jobs report. Of course the news about jobs dominated the headlines, and it dominated the action in the markets as well. Jobs were decent. They came in better than expected at 227K, and December and January were revised higher. The unemployment rate held at 8.3% despite more people coming back into the jobs market. That means there were more jobs available to soak them up. That was great news, and the market did bounce to the upside. There were problems with the report, but there are problems with every report. The trend is better, but there are issues about this trend. Yes, the numbers are better, but there are other factors to consider. I will get to those later.

Stocks were up, but where did they get up to? The SP500 is back at its May highs. That puts it at about the prior post bear market peak. It did not do any real damage to that level. Indeed, it faded back after moving through it intraday. There is similar action on the DJ30 with a bounce back up toward a prior high. Not even making that level. NASDAQ bounced back up to its prior high, but it did not move through it either. Up on the day, for sure, but it was not stellar action.

This leaves the market in position to answer the question next week as to whether it will make a breakout or if it will fade back and consolidate or correct. There are still stocks set up to the upside. There are stocks that have been running well that continue to run to the upside and perform very well. At the same time, there are stocks set up to fall, and they are key stocks as well. We will see how it shakes out, but we will be ready for either direction. The market is at a point where it has run a long way. It is bumping at resistance and has not been able to make the break through. It is trying to buy some time just as the Fed tried to by time and hope that its policies took effect to get the market moving before inflation took off. The market is trying to move laterally, buy some time, and let it catch its breath and consolidate so it can try to make the next move higher.

Looking at the morning action, futures were moving higher up into the actual release of the jobs report. They had been hesitating, but they did slightly tick higher ahead of the report. They faded after it came out, but the market caught itself and rallied higher as trading began. It held up well for most of the day before fading in the afternoon and trading laterally. It did manage a bounce late in the session to put a bit better face on it and to hold the gains. But as noted, the major indices did not move through their prior peaks. They did not scare anyone with their power. On the other hand, they did not roll over and sell off. That was one of the scenarios we were watching for, and it did not develop. But the indices did not provide a clear picture as to whether it was a hands-down winner and they were going to move higher, or if they were just going to bump up at those highs again and roll back over.

The gains were decent on the day, but nowhere near what they were on Thursday.

SP500, +0.36%; NASDAQ, +0.6%; Dow, +0.11%; SP600, +1.28%; SOX, +1.08%

Looking at the percentage gains, there is a definite bias toward the growth indices or growth sectors. They were the ones leading higher, and frankly they helped lead the market to the upside on this last leg up to the prior highs. Now we will see if they continue on and give the indices the punch needed to break through those highs, or if the lagging sides of the market such as manufacturing (as seen with CAT) pull them back down once more. There is also a third scenario. Perhaps those that are moving higher and those that are setting up to break to the upside will provide enough impetus to hold the market high (or at least hold where it is now) as the others fade. Kind of like the new replacing the old that are tired and holding the status quo.

That does not do much for moving higher, but think of it kind of like the unemployment rate today. It held at 8.3% even as more people came back to the market. That is typically what drives up unemployment rate, but there were enough jobs to offset them. Kind of the yin and yang, or like the Seinfeld episode where he was even-steven. He threw $20 out the window and then he found $20 in a pocket somewhere. That is hardly the case here; not a true, pure analogy, but you get the idea. The market is set up. The question is which way it will go.


OTHER MARKETS

Dollar. 1.3116 versus 1.3280 euro. The dollar posted a gain against the euro, but it was down against the other currencies and the DXYO lost ground. It is in this double bottom at a support level. It rallied through the hump in the pattern, but it gapped right back down. A little mini-island reversal. We will probably see a pullback to the bottom of the range as the U.S. struggles against the other currencies. The Japanese yen is a little stronger. The Bank of Japan will probably try to intervene as it does not want a stronger yen. It has not wanted a stronger yen in the past 15 years that I can recall. Maybe even longer.

You would expect the dollar to be stronger on a better jobs report. It just was not across the board.


Bonds. 2.05% versus 2.01% 10 year U.S. Treasury. The 10 year sold as you would anticipate. The notable move was above 2% for the week, and that drove bonds down to the bottom of the range at the bottom of this triangle. They did bounce off of the lows. It is getting interesting. Will they be able to mount a run higher off of the bottom of the triangle? They are pinched down into the point of the triangle, and this is the lick log. They will have to either make a break or not. At this point in the past they have showed the doji similar to what they showed on Friday and have bounced, but they have never broken out. As noted, this is the lick log. Something will happen over the next week with bonds. They could break down, which would suggest that the Fed will not post more Quantitative Easing and that the economy is good enough for bond yields to rise. The question is will the Fed let them rise? It still wants that easy money policy. Maybe no QE3, but it wants to keep the rates low.


Gold. 1,711.20, +12.50. Gold had an interesting day, and indeed an interesting week. Gold has been somewhat of an enigma trade. It broke out of its channel in late January. It rallied a bit, tested, made a higher low, and then broke to the upside. It looked solid, and then came the Bernanke testimony two Wednesdays back. He did not say anything about QE3. Investors wondered "Where the heck is our inflation trade?" Then they sold gold. Gold continued down, but it held at the 200 day EMA and at some interim peaks and valleys. It bounced. Not big, but Wednesday, Thursday, and Friday it was to the upside. Friday was volatile, but it snapped back and posted a good gain up to the 50 day EMA.

Looks as if gold wants to try to make the break back to the upside. Maybe there is a realization that there will be inflation whether or not the Fed pulls out a QE3. Jim Rogers is saying that there is no question that prices are up and that the government is lying to us about prices. The EPI shows inflation at 8% on the stuff you buy every day versus throwing in the washer and dryer, the flat screen TV, and personal computers. We all know those prices are going down, but the prices of the things that we eat and put in our tank and simply need to get by every day are going up. Perhaps that is why gold looks to have found a bottom and is looking to bounce once more.


Oil. 107.40, +0.82. Oil closed higher as well. It was down early, but then it reversed. That makes sense given the economy is improving, even if Europe is down, China is trying to slow, and Brazil's GDP fell to 2.7% growth. Then there are all the troubles in Iran. I heard it said today that we are at the World War II moment now. The longer we wait (and we have already waited too long) the more costly it gets if we are truly serious about stopping Iran from getting nuclear weapons. Or we will just let them have nuclear weapons, and many believe the administration is willing to let that happen versus having any serious confrontation.

I can see the setup, however, that Israel will be forced to act before it gets it too late and the ability to stop Iran gets beyond their technology. And then we do not back Israel. We may say that Israel acted without our permission, and that could get kind of ugly. But I digress. Suffice it to say that there are a lot of tensions in Middle East that are not helping the price of oil.


TECHNICAL SUMMARY

The internals were kind of lackluster, but it was a Friday.

Volume. NASDAQ -2.5%, 1.56B; NYSE -0.5%; 662M. It is a little disappointing to see volume decline as the market continued to recover. Recall that volume was quite accelerated on Tuesday with the selling, and that shows there are more sellers in the market. But there are three days to the upside. Does that mean anything? Yes and no. It is good to see the market bounce back up, but we will look at the technical picture momentarily. Even though it did rebound, the light volume and where it closed are indicative of a continued issue with breaking through these levels. That does not necessarily mean it will roll over, but it could trade in that range.


Breadth. NASDAQ +2.4:1; NYSE +2.3:1. Breadth was not bad. Small caps and techs in general were better than large cap techs. The smaller issues were helping to fill in the market and push it higher. That is what it needs because a lot of big names are struggling right now. We need a bunch of soldiers to fill in the gap and hold that market to the upside.


THE CHARTS

SP500. I am looking at that Tuesday selloff. Volume was up. It was not huge, but volume was huge a week before when SP500 broke to its new post bear market high, but then reversed and gave it back. The two largest volume days in the past two weeks have been to the downside. That is not necessarily great news. Looking at the third highest volume session in the last two months, we can see that it was an upside day. It is about 2:1 when you look at the big volume days.

That said, we held at the February peak and had a three-day rebound. A three-day pullback and a three-day rebound on declining volume. SP500 even reached through the prior post bear market high on Friday, but it could not hold the move and closed right at that prior high. It is set up now. It can fall back in the range and continue to trade. It can fall back further down toward the 50 day EMA or the October peak. Or it could make the breakout. The odds of a breakout may not be that great. The odds of a breakdown are not that great either. Unfortunately, I am talking about a narrow, choppy trading range. I would prefer to have a trading range that was big and that we can easily play up and down, but we may not get that.


DJ30. The Dow is similar, but not in as good of shape as the SP500. Recall that the Dow is the one that looks like it is having this rollover top. And you can see the head and shoulders. It tried to break through those highs from early February that set up the left shoulder. It got close. It went through the high from early February, but it pulled back well off of its high to close. It could be in the formation of that right shoulder. We are still looking at that as a potential downside play, to see the Dow break lower and come back to test these lows in the range from late January. That gives us a nice downside play to take advantage of as the Dow trades in a range, consolidating the gains. I think that is the most likely scenario for all of the indices. Not a huge breakout and not a big selloff. Just range trading. After all, the economy is improving. Europe is getting its stuff all in one pile. There should not be any reason to sell off (at least not an overt reason).


NASDAQ. NASDAQ put in a decent day, moving back up to its prior high. Volume has been a bit lower on the rebound. But techs were no doubt in the lead just as they were in the lead on the rally to the upside. That helped the market make its positive break. The question mark we have is that as NASDAQ matches the prior high (the new post-bear market high, those levels hit in late February) then MACD is making a lower high. We are running out of a little momentum. Does that mean a rip roaring selloff? No. Probably range trading, as I mentioned. It bounced once off of its prior high just as it did after it broke through it in early February. So it looks like that could be a support level where we see NASDAQ trade basically between 3000 down to 2900. It could drop lower toward the 50 day EMA at 2856. We will have to see how it plays out. There is this gap also from early February, and that could provide a needed gap fill. That would put it basically where the 50 day EMA is right now around 2860. It is not a big move 100-120 points to the downside.


SP600. The small caps also posted a nice day. Up three days in a row after some ugly downside a week and a half ago. It broke through the 50 day EMA on Tuesday, but then it tried to recover Wednesday. It could not do it, but Thursday and Friday it marched right back through. Now it is at a key level. It could not bust through it on Friday, fading back. But it is still strong to the upside as the small caps help push up the breadth. They posted nice gains. This could be the support that the market needs, with those other guys coming in and holding it up while the household, name-brand stocks take a breather.


SOX. The SOX posted a nice gain as well, up over 1%. The third day to the upside after this doji on Tuesday. 1-2-3 down, doji, and then 1-2-3 back up. This is going to be more problematic. Perhaps we get a little head and shoulders set up. Perhaps. Maybe this is the test back up. We will see if it breaks. As with the rest of the indices, three days to the upside, recovery from the selling, but not a clear affirmation that they will break to a new rally high on this move. I do not think that was shown at all. Indeed, with the number of downside setups we are seeing versus the number of upside setups, they are getting pretty even in the market. That does not necessarily mean it will tank; it just means that as money moves from one area to another, it drops that area that it left but bolsters the area it is moving to. That somewhat maintains the status quo. It is kind of maddening, and semiconductors were maddening for everyone here today. It is amazing when these moves happen and people get on edge and everything starts bothering them. "Where it heck is my pen?" All of a sudden a pen becomes very important. When times are good they will just grab another one. Today it was, "Who took my pen?!"

Stocks like KLAC and NVLS were moving up. All of a sudden they broke back up after they looked to be breaking down. But I digress. The transports were three days up as well, but a doji at the 50 day EMA. They definitely remain one of the downside indicators for the market overall.


LEADERSHIP

There are downside setups, upside setups, and those that are in between.

Retail. Some retailers continue to perform quite well. FOSL is continuing its move to the upside. Hard to complain about that with a 2.6% gain. TJX was up 1% on the day. HLF was up 3.6% on the day. Strong moves indeed. NKE was up 2%, and SCSS was up 3.7%. Retail across the board continues to perform very well.

Semiconductors. The semiconductors were trying to come back from the dead and bugging the heck out of us. KLAC broke back up through the 50 day EMA. NVLS broke back up above its channel line. Not bad. Not all of them are out of the woods. SLAB remains unable to bounce after selling off hard. BRCM bounced up off that doji at the 200 day EMA. Maybe it makes the break. We are still watching it for a possible downside play.

Manufacturing/Machinery. Then you have the stocks that have been the old standbys and doing so well. CAT is not looking so hot right now, and that goes across the board when it comes to manufacturing stocks. JOY is showing a bear flag, bouncing up after gapping down. It looks like it could roll down pretty hard from here.

Metals. There are issues with some metals stocks. AKS is bouncing back after selling off. There have been really ugly downtrends. FCX bounced modestly, but has turned back down on Friday on volume when most everything else was moving to the upside.

Miscellaneous upside movers. There are downside setups in key areas as well. What wins out? We have a lot of potential downside moves, but we also have stocks that are running to the upside and looking quite strong. There are other stocks that we moved into during the week or have bought recently and are performing very well. OSIS, for instance, looks solid and is bouncing up higher again. GTLS is making a further upside break. KIRK came back very well from an initial rude treatment on its jobs report. MA is not blowing it out, but it is moving up nicely. IACI in retail is performing well.

As you can see, there are stocks breaking higher after pretty decent consolidations, and they are supporting the market just as other stocks are in trouble and are undermining the market's advance. The net effect thus far? It has not been a breakdown, obviously. It has been some weakness in the market overall, but it looks like it might be turning into a sideways chop or range trade versus any kind of major selloff. Of course, that is exactly the thesis we have been putting out there. That there will be rotation in the market, but there will not be a major selloff as a result. Just a test/correction that is much needed, but that will not end the rally, particularly if the economic data continues to look good.

We just have to watch out for a major selloff. That may suggest (as it did in 2011) that the economic data will not hold up, and maybe ECRI is right and we will have a selloff into the summer or fall.



THE ECONOMY

Jobs continue their improvement trend. The questions relate to permanence, quality, and patience.

More people finding jobs . . .

227K new jobs, 233K private, upside December and January revisions.
8.3% unemployment even with 500K people coming back into the workforce.

Noteworthy: Participation rate rose to 63.9% from 63.7% in January BUT the unemployment rate did not rise. Typically it jumps again as people come back into the workforce.
Conclusion: Enough jobs were created to soak up those coming back into the market OR they are giving up and creating their own companies.
Disconnect: Not enough jobs to keep up with population so how could unemployment remain constant?

But will they feel this way before too long?

Reality Check 1: Those unemployed greater than 27 weeks are STILL over 50% of the unemployed. The HIGH in the 1980's deep recession was 26%. At this point in that recession we were growing at 7% GDP per quarter for several quarters with millions of quality jobs created.

Reality Check 2: Over one-half of the professional and business services sector jobs growth (45K jobs out of 84K created) were temporary jobs. Companies are still at the 'try before you buy' stage.

Reality Check 3: Job quality is poor. During the Bush years the knock on the recovery was 'job quality.' These are even worse with lower pay (wages are negative), lower end jobs. 71,000 were in private healthcare at the low end.

Reality Check 4: At the current rate of job creation, one that does not even meet population growth, it will take 10 YEARS to get back to pre-recession levels. If it improves to 350K/month it still takes 7 years!

Reality Check 5: With the very mild winter construction jobs still lost 13,000 workers. Retail, the supposed bastion of the economic recovery, lost 7,400 workers.


Not enough jobs to keep up with population growth, more people came back into the market, but unemployment rate remained steady.

Perhaps means sole proprietorships or small businesses emerging. That is a positive for the economy.

Positives and the same old negatives. Overall better than where we were.



Trade Deficit surges, but that shows we want to buy more.


Wholesale Inventories rise less than expected, but sales are less than expected as well.


TO VIEW THE ECONOMY OVERVIEW CLICK THE FOLLOWING LINK:

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



THE MARKET

SENTIMENT INDICATORS

VIX. The VIX is back down to the recent levels that have led to bounces in volatility and minor corrections in the stock market. There have just been minor corrections, right? We are trading in a range, and they are somewhat related now. They have come into sync with one another, but they are not big moves. As I have said before, volatility can remain low for years while the stock market rallies. The fact that it is bouncing around in this range is not indicative that the market is about to roll over. Although the more it trades as this and shows the inability to break out, that could lead to a breakdown. But, as I said, the indices are buying time. They are trying to hold up and trying to be a little stingy with their gains. They want to hang onto them while they rest, consolidate, and prepare for the next move. You like to see stocks hold their gains because you can continue your upside without any appreciable loss. That is the sign of a healthy market.

VIX: 17.11; -0.84
VXN: 18.11; -0.94
VXO: 15.37; -0.76

Put/Call Ratio (CBOE): 0.9; -0.04

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: 47.9% versus 51.1%. After holding flat for two weeks the bulls are fading after the pullback from the highs. Good to see the bullishness back off. It is not excessive, it is not excessively low either. They are off the 55+ level even near the highs as investors get a bit pensive. Bigger picture that is good for the upside. That was the highest level since April and May of 2011, the peak of the post-bear market high. Now the indices are back at that level and so are the bulls. All the more reason to watch this action at the prior highs. 35% is the threshold measuring bullish versus bearish action. Six weeks the bulls were below bears. A powerful sentiment signal but now dissipating. 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: 26.6% versus 25.5%. Right back up to the level three weeks back. A bit more uncertainty among bears but not running higher to levels that suggests a new surge upside. Makes sense given where the indices are. As with bulls, not excessive either way. Solidly lower after fter spending weeks at 30%ish. Not at a bearish level but they are growing more confident even as the market hits the prior highs and is not blasting on through. 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: +17.92 points (+0.6%) to close at 2988.34
Volume: 1.561B (-2.44%)

Up Volume: 1.13B (-30M)
Down Volume: 436.53M (+13.02M)

A/D and Hi/Lo: Advancers led 2.42 to 1
Previous Session: Advancers led 2.56 to 1

New Highs: 121 (+43)
New Lows: 21 (-1)


SP500/NYSE

Stats: +4.96 points (+0.36%) to close at 1370.87
NYSE Volume: 662M (-0.45%)

Up Volume: 2.33B (-670M)
Down Volume: 1.22B (+706.64M)

A/D and Hi/Lo: Advancers led 2.33 to 1
Previous Session: Advancers led 3.93 to 1

New Highs: 159 (+39)
New Lows: 6 (-4)


DJ30

Stats: +14.08 points (+0.11%) to close at 12922.02
Volume DJ30: 103M shares again, same as the 103M shares Thursday.


MONDAY

There is a lot of economic data even after the jobs report. We will see Retail Sales. FOMC has a rate decision on Tuesday. We will have Empire Manufacturing and the Philly Fed. We will see the PPI as well as Industrial Production and Capacity Utilization. All of those are pretty important based on what ECRI has been forecasting. A lot these feed more or less directly into its model. It will be an important week of economic data yet again.

I want to get back to a comment I made earlier. I said that Friday did not really answer whether there was a rally or correction, but it did leave the table set for next week to make that determination. Again I do not think there is much likelihood of a breakout unless NASDAQ and the small caps can lead the move to a breakout aided by the chips, of course and garner enough strength to pull those stocks that are set up to the downside along with them and to keep them from falling. If that happens, great. That makes us money on our upside positions. We can continue to play those because we will get more breakthroughs, but we will also have to watch a test. The best time to move in after three days to the upside is to get a test instead of buying on the breakout. Four days up. How many times has this market made a four-day move? Or five or six or seven? Not many. You get a breakout, then it comes back and makes a test, and that is when you want to play.

I do not think we will get that. If we do, we will be ready to play it when we test. For now, we will still be looking for some upside plays that look good. As noted, money is moving through the market. Just because the market moves up and down in a range does not mean that stocks will go down on the days that are down and up on the days that are up. There is rotation. Money is flowing into different, new areas and pushing those stocks higher as it comes out of some of the large cap names that have helped lead the market to this point.

The market can decline on any given day, but those stocks can rally on any given day. We will continue to look for those because they can make us money. If they are set up right and have not made big runs and are set to make the breaks and rallies, then we can continue to play those. But there are also many stocks to the downside, as noted. We have plays on the report, and we will continue to put more on. There are getting to be more downside setups about as many as there are upside. That is an indication of a market changing character. Not necessarily for a crash, of course, based upon what I have been talked about. But it is that sideways chop and maybe a bit of a deeper test. We will have to see how that plays out. But we have to be ready to play these downside plays that present themselves.

It has been tough to the downside, I admit that. You get them slapped back in your face with the "buy on the dips" mentality, but you keep putting some money their way because they will break and sell off ( perhaps pretty big). We will play the ranges now. Our expectations will be just to play the ranges, and we will even be looking at some index plays. If we are going into a range, we can play that and make money just as we can make money off of stocks trading in a range and off of indices trading in a range. At the same time we get the stocks that break out and run higher, and then we make money off of those. And there are those that break down because the money is leaving them and going elsewhere. We can money off of those as well.

There is always a way to make money in the markets. You just have to recognize what the market is doing, adjust your expectations accordingly, and make your plays within those parameters. Then you take profits when it is logical. If the market goes beyond your expectations, then you let part of it run and you will pick up gain on that. If it plays up to your expectations and turns when you think it does, then you have made your money and you go looking at the next play the other way.

I will see you on Monday for another busy week. I think we will get some consolidation for awhile. Have a great weekend!



Support and Resistance

NASDAQ: Closed at 2988.34

Resistance:
3000 is the February 2012 post-bear market high
3026 from 10/2000 low
3042 from 5/2000 low


Support:
2900 is the March 2012 low
2888 is the May 2011 peak and PRIOR post-bear market high
2879 is the July 2011 peak
2862 is the 2007 peak
The 50 day EMA at 2856
2841 is the February 2011 peak
2825 is the 2007 closing peak.
2816 is the early April 2011 peak.
2754 is the October 2011 high
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
2686 is the January 2011 closing low
2676 is the January 2010 low and the December 2011 peak
The 200 day SMA at 2676
2645-2650ish from December 2010 consolidation
2643 is the September 2011 high
2612 is the late August 2011 peak
2603 is the March 2011 intraday low (post-Japan low)
2599 is the June 2011 low and NASDAQ
2593 is the November intraday high
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 island reversal gap point
2532 is the early August gap down point
2469 is the November 2010 low
2441 is the November 2011 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


S&P 500: Closed at 1370.87

Resistance:
1371 is the May 2011 peak, the post-bear market high
1378 is the February 2012 peak
1425 from May 2008 closing highs
1433 from August 2007 closing lows
1440 from November 2007 closing lows

Support:
1357 is the July 2011 peak
1344 is the February 2011 peak
1340 is the early April 2011 peak
1332 is the early March 2011 peak
The 50 day EMA at 1328
1325-27 is the March 2008 closing low and the May 2006 peak.
1318.51 is the May 2011 low
1313 from the August 2008 interim peak
1295 to 1294 is the April 2011 low and the February 2011 consolidation low (bottom of the trading range)
1293 is the October 2011 peak
1275 is the January 2010 low, early January 2011 peak
1267 is the December 2011 peak
The 200 day SMA at 1259
1258 is June 2011 intraday low
1255 is the late December 2010 consolidation range
1249 is the March 2011 low (post-Japan)
1235 is the mid-December 2010 consolidation low
1231 is the late August 2011 peak
1227 is the November 2010 peak
1220 is the April 2010 peak
1209 is the mid-August 2011 high
1196 is the November 2010 consolidation peak
1178-1180 is the October 2010/November 2010 consolidation low
1158 is the November 2011 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
1099 from the mid-July interim peak
1075 is the October 2011 intraday low


Dow: Closed at 12,922.02
Resistance:
13,056 is the February 2012 high
13,058 from the May 2008 peak on that bounce in the selling

Support:
12,876 is the May high
12,754 is the July intraday peak
The 50 day EMA at 12,691
12,391 is the February 2011 peak
12,284 is the October 2011 peak
12,258 is the December 2011 peak
12,110 from the March 2007 closing low
12,094 is the April 2011 low
The 200 day SMA at 12,019
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
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

March 5 - Monday
Factory Orders, January (10:00): -1.0% actual versus -1.9% expected, 1.4% prior (revised from 1.1%)
ISM Services, February (10:00): 57.3 actual versus 56.0 expected, 56.8 prior

March 7 - Wednesday
MBA Mortgage Index, 03/03 (7:00): -1.2% actual versus -0.3% prior
ADP Employment Change, February (8:15): 216K actual versus 218K expected, 173K prior (revised from 170K)
Productivity-Revised, Q4 (8:30): 0.9% actual versus 0.9% expected, 0.7% prior
Unit Labor Costs - Revised, Q4 (8:30): 2.8% actual versus 1.1% expected, 1.2% prior
Crude Inventories, 03/03 (10:30): 0.832M actual versus 4.160M prior
Consumer Credit, January (15:00): $17.8B actual versus $12.0B expected, $16.3B prior (revised from $19.3B)

March 8 - Thursday
Challenger Job Cuts, February (7:30): 2.0% actual versus 38.9% prior
Initial Claims, 03/03 (8:30): 362K actual versus 355K expected, 354K prior (revised from 351K)
Continuing Claims, 02/25 (8:30): 3416K actual versus 3405K expected, 3406K prior (revised from 3402K)

March 9 - Friday
Nonfarm Payrolls, February (8:30): 227K actual versus 206K expected, 284K prior (revised from 243K)
Nonfarm Private Payrolls, February (8:30): 233K actual versus 220K expected, 285K prior (revised from 257K)
Unemployment Rate, February (8:30): 8.3% actual versus 8.3% expected, 8.3% prior
Hourly Earnings, February (8:30): 0.1% actual versus 0.2% expected, 0.1% prior (revised from 0.2%)
Average Workweek, February (8:30): 34.5 actual versus 34.5 expected, 34.5 prior
Trade Balance, January (8:30): -$52.6B actual versus -$48.2B expected, -$50.4B prior (revised from -$48.8B)
Wholesale Inventories, January (10:00): 0.4% actual versus 0.6% expected, 1.1% prior (revised from 1.0%)


March 12 - Monday
Treasury Budget, February (14:00): -$229.0B expected, -$222.5B prior

March 13 - Tuesday
Retail Sales, February (8:30): 1.0% expected, 0.4% prior
Retail Sales ex-auto, February (8:30): 0.7% expected, 0.7% prior
Business Inventories, January (10:00): 0.6% expected, 0.4% prior
FOMC Rate Decision, March (14:15): 0.25% expected, 0.25% prior

March 14 - Wednesday
MBA Mortgage Index, 03/10 (7:00): -1.2% prior
Current Account Balance, Q4 (8:30): -$113.8B expected, -$110.3B prior
Export Prices ex-ag., February (8:30): 0.0% prior
Import Prices ex-oil, February (8:30): 0.1% prior
Crude Inventories, 03/10 (10:30): 0.832M prior

March 15 - Thursday
Initial Claims, 03/10 (8:30): 358K expected, 362K prior
Continuing Claims, 03/03 (8:30): 3415K expected, 3416K prior
Empire Manufacturing, March (8:30): 15.0 expected, 19.5 prior
PPI, February (8:30): 0.5% expected, 0.1% prior
Core PPI, February (8:30): 0.2% expected, 0.4% prior
Net Long-Term TIC Fl, January (9:00): $17.9B prior
Philadelphia Fed, March (10:00): 12.5 expected, 10.2 prior

March 16 - Friday
CPI, February (8:30): 0.4% expected, 0.2% prior
Core CPI, February (8:30): 0.2% expected, 0.2% prior
Industrial Production, February (9:15): 0.5% expected, 0.0% prior
Capacity Utilization, February (9:15): 78.8% expected, 78.5% prior
Michigan Sentiment, March (9:55): 76.0 expected, 75.3 prior

By: Jon Johnson, Editor
Copyright 2012 | All Rights Reserved

Jon Johnson is the Editor of The Daily at InvestmentHouse.com

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