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Abc Patterns Are Still Underway
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Tuesday left the day red on much higher volume than we saw on Monday. Monday’s post quadruple witching lackluster action was able to wind Tuesday for some nice volatility. After a very weak start the market turned and ran to new highs, but unable to hold the gains came back to mid range and a red close. Gold closed up $3.10 at $890.30 an ounce and oil closed 26 cents at $137.00 a barrel. The market has a lot to look forward to into Wednesday. We will kick the day off with early economic news and then probably settle into some very narrow range once the first hour closes until the Fed’s announcement at 2:15. We aren’t expecting any rate changes or a lot of change in the statement, but the market is likely to be very quiet into the announcement and to listen to any word changes in the statement in regards to future rate increases and inflation concerns. After the bell we have several big stocks reporting to keep the volatility alive into Thursday. The Nasdaq was not as strong as the SPX today, while the SPX and Dow gave yesterday’s high a look the Nasdaq stayed well off them. All indexes closed with a new low on the week. We are oversold (short term) and not holding up well, the market is in need of a nice retracement to work this off and maybe the Fed announcement will deliver that. This market is without a doubt in need of relief, but don’t let the fool you on further downside. The ABC patterns we are watching are still in progress and still open for the down move. Even with the NDX, COMPX, SPX and DOW all piercing the lower Bollinger bands, we are still not seeing the CCI or the RSI exhausting this drop. Short term we are oversold but longer term we have room to fall still. The ABC’s are still in motion and getting worked out. The S&P 500 sits just over 70.7% (1310.68) and is into the C leg of the ABC pattern possibly forming. We have the measured move and 78.6% just under us at 1296.20 area to keep looking for as big support. The Dow (INDU) is well into its C leg on the ABC pattern possibly forming and has about 110ish points to fall until it’s complete. Tthe March 10th lows down at 11731 got a look today and we have the January lows 11634 still under us. Now remember the C legs don’t necessarily have to be symmetrical, but if this is our pattern and we have A and B formed and symmetrical on the SPX and INDU. Which leaves us a little more room to fall to finish the C leg. Joining the SPX and INDU is the SOX, which has the A and B, C leg can take us onto the 372-370 area. Economic data for the week (underlined means more likely to be a mkt mover): Wednesday 7:00 MBA Purchase Applications, 8:30 Durable Orders, 10:00 New Home Sales, 10:30 Crude Inventories, 2:15 FOMC Policy Statement, Thursday 8:30 Chain Deflator-Final, 8:30 GDP Final, 8:30 Initial Claims, 10:00 Existing Home Sales, 10:00 Help Wanted Index, 10:30 EIA Natural Gas Report, Friday 8:30 Personal Income, 8:30 Personal Spending, 8:30 PCE Core Inflation, 10:00 Consumer Sentiment. Some earnings for the week (keep in mind companies can change last minute): . Wednesday pre market GIS, ISLE, SMSC, and after the bell BBBY, NKE, ORCL, RIMM. Thursday pre market CRMT, DFS, FLE, LEN, MKC, and after the bell CAN, FINL, INTV, MU, PALM, TIBX, PAY. Friday pre market KBH, SCS. ES (S&P 500 e-mini) Wednesday’s pivot 1316 weekly pivot 1335.25. No test of the weekly pivot yet, it is rare we don’t test it each week but possible we won’t. But keep that number in mind on any climb tomorrow. Intraday support: 1314, 1310.25, 1308.75, 1305.25, 1302.75, 1299, 1294.50, 1291.25-1290.25, 1280.25. Resistance: 1318.75, 1322.25, 1324.75, 1327.50, 1329.50 38.2%, 1332.75, 1336.75-1337.25, 1340.25, 1341.50 fills gap, 1344.50 61.8%, 1349.75-1350.50.
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