A Few Thoughts Before the Open:
The overall market moved moderately lower yesterday in a relatively broad based move that saw the majority of the indices I track move lower on the day. In reviewing the charts from yesterday’s trading activity, it looks like the market is basically settling into a new trading range at the current levels. Oil was lower yesterday by $1.29 to $86.85 per barrel, and Gold was higher by $27.00 to $1,783.40 per ounce. Wheat was higher by $0.122 to $7.246 per bushel, and corn was higher by $0.066 to $7.140 per bushel.
It should be noted that this week is options expiration week. I am somewhat expecting a brief rally at the end of the week as traders unwind their positions.
Additionally it should be noted that we have Producer Price Information ‘PPI’ Information being released today and Consumer Price Information ‘CPI’ being released on Thursday. This along with the unemployment numbers has the potential to move the market this week.
In looking at the various indices I track, I have the following comments.
Dow Jones Industrial Average: The Dow Jones Industrials closed at 11,405.93 The Dow has basically rallied to the upper end of its trading channels. I feel that our downside support level remain at 11,006.22 on a closing basis, and the new upside resistance level, while somewhat in flux remains around the 11,444 level on a closing basis. Hopefully this will clarify itself in the next few trading sessions.
S&P 500 ‘SPX’: The S&P 500 closed at 1,192.76 I see upside resistance on the S&P 500 at 1,225.85 and downside support at 1,127.79 on a closing basis.
NASDAQ 100 Index ‘NDX’: The NASDAQ 100 closed at 2,194.27 I continue to see downside support on the NDX at 2,100 However, upside resistance is somewhat in flux as the market recovers from an extreme sell off earlier this month.
The Dow Jones Transportation Average: The Dow Transports closed at 4,593.53 I see upside resistance on the Dow Transports at 4,749.99 and downside support level at 4,320.05 on a closing basis.
M.S. Commodities Related Equity Index ‘CRX’: The ‘CRX’ closed at 894.07. I see upside resistance on the ‘CRX’ at 924.89 and downside support at 847.10
KBW Banking Index ‘BKW: The ‘BKW’ closed at 38.45. I see upside resistance on the ‘BKW’ at 41.42 and downside support at approximately 36.33 on a closing basis.
S&P Banking Index ‘BIX’: The ‘BIX’ closed 114.56. I see upside resistance on the ‘BIX’ at 117.52 and downside support at 100.96 on a closing basis.
Amex Broker/Dealer Index ‘XBD’: The ‘XBD’ closed at 92.23 I see upside resistance at 92.97 and downside support at 80.87 on a closing basis.
S&P Insurance Index ‘IUX’: The ‘IUX’ closed at 164.98 I see upside resistance on the ‘IUX’ at 175.13 and downside support at 143.80 on a closing basis.
Amex Gold & Silver Index: The Amex Gold & Silver Index ‘XAU’ closed at 210.28 I see upside resistance on the ‘XAU’ at 220.36 and downside support at 208.78
Amex Oil & Gas Index: The Amex Oil & Gas Index ‘XOI’ closed at 1,148.78 I currently see upside resistance on the ‘XOI’ at 1,228.18 on a closing basis. I am expecting the ‘XOI’ to continue to move lower and test 1,141.92 on a closing basis.
M.S. Cyclicals Index: The M.S. Cyclicals Index ‘CYC’ closed yesterday at 884.38 I currently see upside resistance on the ‘CYC’ at 913.44 and downside support at 868.97 on a closing basis.
M.S. Consumer Index: The M.S. Consumer Index ‘CMR’ closed at 699.59 I currently see upside resistance on the ‘CMR’ at 710.94 and downside support at 691.44 on a closing basis.